KazSabton

This page is part of the Facilities Collection.

KazSabton was previously known as the Tselinnyy Mining and Chemical Combine. At the end of the 1950s, the Soviet Union launched geological explorations to find uranium for its nuclear program. Construction of the Tselinnyy Mining and Chemical Combine, known as “Mailbox 5175,” was begun in May 1956 following the discovery of large uranium, uranium-molybdenum, and uranium phosphate ore deposits in northern Kazakhstan. In 1960, authorities chose the present-day site of Stepnogorsk as the Combine’s headquarters. Small towns, such as Zavodskoy, Zhangiztobe, Zaozernyy, and Krasnogorsk were founded near Stepnogorsk to house the Combine’s Hydro-Metallurgical Plant, Repair Plant, Mining Equipment Plant, and other necessary components. ^{1 2} During the Soviet era, the Tselinnyy Mining and Chemical Combine, along with the Navoi Mining and Metallurgy Combine in Uzbekistan and the Prikaspiyskiy Mining and Metallurgical Combine, was at the core of the USSR’s uranium production industry. ³

Following Kazakhstani independence, the government of Kazakhstan continued to operate the Tselinnyy Combine, selling U3O8 to Energy Resources of Australia (ERA), Cameco, and Uranerz Exploration & Mining (UEM). ⁴ Output from the Combine gradually declined during the 1990s for three reasons: low-grade ore from Tselinnyy’s underground mines, the cost of transporting ore to the Combine, and the lack of reinvestment. ⁵ In 1996, the Kazakhstani government contracted World Wide Minerals Ltd. of Canada to manage the facility. By spring 1997, World Wide Minerals ceased production at the facility because the Kazakhstani government would not issue export licenses for the uranium. In addition, it did not receive any uranium from the facility’s southern mine production, which was necessary to operate the facility efficiently. ⁶ The Kazakhstani State Property Committee cancelled the contract with World Wide Minerals and transferred the Tselinnyy Combine to state-owned Kazatomprom on 1 August 1997. In 1999, the government of Kazakhstan put the then-bankrupt Combine up for sale. Attempts to sell the Combine in January and February 1999 failed due to lack of interested buyers. ⁷ On 16 April 1999 Sabton Limited, a Cyprus-registered subsidiary of the Israeli-owned Africa Israel Investment Ltd., bought the Combine for 36 million tenge ($317,000 as of 16 April 1999). KazSabton was registered in May 1999. Sabton, which outbid Kazatomprom for the Tselinnyy combine, agreed to pay 320 million tenge ($2.8 million as of 16 April 1999) in back wages and debts, compensate Kazatomprom for its expenses on financing the plant prior to the sale, and present a long-term investment plan. ⁸ As of January 2000, Sabton had cleared 80 million tenge ($702,000 as of 16 April 2000) of this amount. In March 2000, Sabton announced plans to invest $100 million from 2000-2005 in KazSabton to develop new products, reconstruct the Hydro-Metallurgical Plant, repair the heat and power station, and develop new deposits in northern Kazakhstan. ⁹

KazSabton produces pollymetallic ores, uranium oxides, oleum, battery acid, heat and electricity. Yellowcake is exported by Kazatomprom. ¹⁰ As of April 2000, ore extraction at deposits within KazSabton’s territory had stopped because of the comparatively poor quality of the ore and high production costs compared to uranium production in southern Kazakhstan. ¹¹

Maximum output of 3,000 tons of uranium per year. In 1993 the facility produced 800 tons of uranium. ¹² The present disparity between capacity and real production is part of an early 1990s trend, attributable to the high cost of uranium mining. ¹³ In 1996, the plant was operating at about 20 percent of capacity. ¹⁴