Kazakhstan considering export tariffs on commodities including metal ores

Kazakhstan is considering introducing export duties on commodities, including metals, to cover its budget deficit, while stimulating more downstream processing to be done domestically, local media reports said Aug. 15.

The country could introduce certain fixed duties on the export of sulfur, coal, ferroalloys, copper and iron ores and concentrates, among some other export items, according to the media reports. The Ministry of Finance was unavailable for comment on the matter.

Earlier in August, Deputy Prime Minister of Kazakhstan Serik Zhumangarin said on his Facebook page that the government is considering various scenarios and ways to increase budget revenues. He said the Ministry of Finance's proposal to introduce export customs duties on certain raw materials is one of the initiatives and "should be analyzed in terms of economic viability and compliance with Kazakhstan's international obligations."

Kazakhstan exports iron ore, copper and ferroalloys in bulk quantities, and if the export duties are introduced, the costs could rise for importers such as China, which is the biggest market for these commodities for Kazakhstan.

In 2023, Kazakhstan exported 11.6 million metric tons of iron ore and iron ore concentrate under customs code 2601, with 55% of the volume destined for China, according to S&P Global Market Intelligence's Global Trade Analytics Suite. China also absorbed about 85% of Kazakhstan's copper ore and copper ore concentrate outflows.

Commodity Insights copper market analyst Ruilin Wang said the duties are unlikely to have a big impact on Kazakhstan's copper exports, given their significance for the country's copper production. "Kazakhstan consumes small volume of copper domestically. Most of the copper products are exported including copper concentrate and refined copper," said Wang.

China's imports of Kazakh copper ore and concentrates totaled roughly 800,000 metric tons in the first six months of 2024 and almost 1.6 million metric tons in full-year 2023, China's customs data showed. The volumes represent just under 6% of China's overall imports of the commodity.

Kazakhstan has recently become a way more significant supplier to China of ferroalloys.

Over January-June, Kazakhstan provided China with 694,000 metric tons of ferrochrome, which equaled to over 35% of China's total inflows of this ferroalloy, according to China's customs data. China also sourced 57% or 8,650 metric tons of its ferrosilicon manganese imports from Kazakhstan.