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The second day of the AMM-2011 is dedicated to the leading practice in innovations, personnel and business partnership of the MMC

5 July 2011, Astana

 The second day of the international mining and metallurgical congress “Astana Mining & Metallurgy 2011” (MMA 2011) held under the patronage of the Ministry of Industry and New Technologies (MINT) of Kazakhstan started working with the parallel “round tables”, “Consolidation. Partnership. Development”, which was organized for the international industry associations, “Personnel for MMC”.


Opening the first of them, the first vice-minister of industry and new technologies, Albert Rau, recalled that in accordance with the Kazakhstan legislation business associations perform skilled expertise of draft laws and regulations, without which neither the law relating to business can be approved. According to Mr. Rau, “This allows us to avoid mistakes, although it procedurally makes Ministry operations more complicated”.

According to him, under the Ministry of Industry and New Technologies there are 19 branch associations have now been accredited. Last year, for the first time, the industry unions received funding from the state in the form of social order for an expert evaluation. First Vice-Minister of Industry and New Technologies called Associations to participate in monitoring the progress of industrialization programs.

In turn, the Chairman of the Board of the National Economic Chamber (NEC) “Atameken”, Azat Peruashev, addressed the colleagues in similar business associations in Austria, Germany, Russia and CIS countries to actively invest in Kazakhstan: “Kazakhstan has developed the best business environment. In addition to the Customs Union foundation the small market of Kazakhstan immediately increased almost 11 times. And this is a significant argument for the investors”.

The Executive Director of the Republican Association of Mining and Metallurgical Enterprises, Nikolay Radostovets, also welcomes the foundation of the Customs Union: “The Customs Union is now removes the borders. If we had any problems with the promotion of the mass of commodities – it was technical aspects. In general, now we can say that the mining workers, as well as mining and metallurgical sector also approve the creation of the Customs Union. It is advantageous for us”.

N. Radostovets noted that in terms of tax legislation Kazakhstan is more liberal than, for instance, Russia: “And now we would like to see the large inflow of Russian capital in Kazakhstan's mining and metallurgical sector, because that tax legislation, which is in Kazakhstan allows to find a unified field”.

Having presented to foreign counterparts how industry associations work in Kazakhstan, Nikolay Radostovets asked them to share their experiences of interaction with government, civilization lobbying business in the EU, Russia and CIS. In addition, the Kazakhstan side was interested in organizational issues of the business enterprises: structure, operational bodies, funding sources and the existence of laws on lobbying.

 

Thus, the Managing Director of the Austrian Association of Non-Ferrous Metallurgy, Shtiftner Roman, said that in his country the small business associations are also combined into larger unions, which, in turn, represent the interests of the industry not only to the official Vienna, but also in the European Union structures. The goal of the structure led by Mr. Shtiftner is also cooperation with trade unions, which are traditionally very powerful in the EU, as well as participation in the formulation of laws concerning labor relations and social security. In this case, the Austrian Business Associations provide its members exclusive services, such as special statistics, market surveys, development of educational standards and professional qualifications.

In Germany, according to Jцrg Hetsch, the Head of the German Economy in Central Asia, business associations also provide various services to its members, but in general, they operate at the expense of membership dues. The only way of the financial involvement from the state is in business associations’ activities – support of the commercial and industrial and handicraft chambers participating in the promotion of German exports to the world markets. Moreover, all enterprises in Germany are obliged to be members of the associations. “Compulsory membership is not greeted by all businessmen. On the other hand, the small businesses otherwise would not survive in competition with larger ones, which have more opportunities for lobbying. However, there are reliefs: for example, new firms and companies are exempt from paying dues for a certain period”.

Alexey Okunkov, the Executive Director of the Association of Industrialists of the Mining and Metallurgical Complex (AIMMC) in Russia, said that several hundred Russian companies became Kazakhstan residents due to a better business climate. He also shared the experience of the AIMMC to successfully interact with the State Duma, the government and regional authorities of the Russian Federation. Mr. Okunkov described the association's participation experience in the work of the Russian tripartite commission for regulation of social-labor relations: “The work of the current line in the mining and metallurgical complex of the RF: “General Agreement – industrial tariff agreement – the agreements of tripartite commissions in the regions” allowed to avoid serious social and economic disruptions in the industry in the last 8 years”.

As a result of the “round table” “Consolidation”. Partnership. Development” the “Memorandum of Associations Cooperation” has been signed.

 

The participants of the “Personnel for MMC” site have also completed the signing of the Memorandum on the need for the Sector Council for Personnel (SCP). It is expected that the SCP will include representatives from government agencies, educational institutions and employers. SCP shall offer a systematic approach to personnel matters for the MMC.

The signing was preceded by hot debates on the need for such structures, developing a system of management competencies for MMC, as well as traditional industry issues relevant to the interaction of subsurface users, educational institutions and state bodies of Kazakhstan.

 

As noted by participants of the discussions, the subsurface contracts bind contributing of 1% annually to the local budgets for the training and development of Kazakhstani personnel in the industry. However, according to Maira Kuandykova, the Managing Director for Corporate Communications of the LLC “ENRC Kazakhstan, in various contracts these percent payments are different - from EBITA, from CAPEX and from other indicators.

 

Subsurface users transfer 1% [of profits] toward Kazakhstani personnel training. But the common requirements for this training are not mentioned anywhere... It is more advantageous for foreign companies to work with local staff, but in Kazakhstan, unfortunately, there are not enough such personnel. Investors work with high technologies, which need to be managed” - Ms. Kuandykova declares.

 

Asylbek Kozhakhmetov, the President-Chancellor of the International Academy of Business (IAB) believes that in order to develop the innovation economy the country should be concerned with training of not only engineers and technicians, but also those who will lead the process of innovations implementation.

The IAB has participated in a training program of the corporate executives for the large Mining companies, within 4 years there are 30 vice-presidents on the MBA program have been trained, on the mini-MBA program there are 120 people and on the management-standard (line managers) – 600 people were trained. For these purposes 1.8 million dollars was spent. What is the result? According to the Director of Corporate Communications at this company, the total economic effect from the introduction of innovative developments of the project participants was 30 million dollars. It might make sense to compare these numbers?” - A. Kozhakhmetov wondered.

He offered MINT to consider project “10000 managers for the implementation of industrial and innovation program in Kazakhstan” to train top, middle and line managers on innovation management programs, including visits to several universities and transnational companies (TNC) of the leading countries.

If properly implemented and applied, the training of the top managers can assist organizations not only to fulfill key strategies, but also provide resources for the process of creating them”, - James Clark stated, an International Expert on leadership and management coaching (USA).

He believes: “If we want the goals of the President in Kazakhstan was achieved, it is necessary to make all possible efforts, including other important factors such as basic management of the employees’ potential and leadership”.

[In the KEI (Knowledge Economy Index) studyfor 2009] Kazakhstan, in terms of GDP, is at the level of Russia, Malaysia and Chile [more than 6], but on the level of knowledge application in the economy we fall behind those almost 2 times, and are on the level of Jamaica, in terms of knowledge application [about 4]... Therefore, while considering the GDP level, it is necessary to be concerned with the industry system development. For these purposes, it is needed that the universities, businesses and the government to operate in one bunchthe Chancellor of the IAB A. Kozhakhmetov claimed.

Innovations in mining and metallurgical complex were also discussed by the participants of the third “round table” held today in the afternoon. They considered the mechanisms and tools of innovation policy for MMC in Kazakhstan, measures of the state support of the innovation policy, the status and prospects of research and development institutions in Kazakhstan.

 

The Deputy Director on Research of the Institute of Mining named after D. Kunaev, Eric Edygenov, announced that up to 95% of mining equipment has been now supplied into Kazakhstan: “The local scientists have developed a number of innovative technical solutions that passed and experienced pilot testing, which may become the basis for the development of mining machinery in the country”.

He has presented a number of Institute projects on this issue.

 

The Head of the Laboratory of Metallurgy Steel of the Chemical and Metallurgical Institute named after Zh. Abishev, Abulhasim Akhmetov, marked that “the world pays great attention to scientific research in mineralogy, ore, and the theory of metallurgical processes, metallurgy and materials science”. The scientist has also called Kazakhstani experts to focus on these areas of research. He recalled that “the results of fundamental and applied research issues of the Kazakhstani scientists in the ferrous metallurgy allowed many enterprises to maintain production levels, and often, simply to survive in difficult 90s”. Mr. Akhmetov has urged the government to create several target projects that envisage, among other things, the financial support of the modern instrumental equipment of the industrial institutions.

The Director of the State Non-governmental Organization (NGO) of the industrial ecology “Kazmechanobr” Alexander Klets notes that Kazakhstan is ranked 18th in the world explored gold reserves (1.6% of world reserves). “However, the real increase in the gold output in Kazakhstan is only possible with the use of innovative technologies. A significant metal production growth occurred at the end of 90s last century. The growth in gold production was due to start of commercial operation in the new gold-processing plants of oxidized ores. In these years, “Kazmechanobr” has developed the new technologies of gold leaching from poor gold ores and industrial wastes” - Mr. Klets recalled.

In turn, the Representative of the Center of the Earth Sciences, Metallurgy and Enrichment, Alexander Panichkin, believes that it is important for Kazakhstan to develop rare-earth metals (REM). “Since 2012 China, a major supplier of rare-earth elements on the world market plans to sharply reduce the supply due to to its own needs. This will increase the cost of metals. With this in mind it is forecasted that the rare metals market will get more new suppliers. Kazakhstan has large reserves of REM... The country should focus on creating its own raw materials and processing sectors of rare-earth metals and take appropriate strategic position on the global market” - A. Panichnik said.

Upon completion of the “round table” the Memorandum of Cooperation of the scientific and business communities in innovative development of the mining and metallurgical industry was signed. According to the document the signers intend to cooperate in the innovative development of mining and metallurgical industry in accordance with the state program for accelerated industrial-innovative development of Kazakhstan for 2010 - 2014 and the program of mining and metallurgical industry development of the Republic of Kazakhstan for 2010-2014.

The parties agreed to cooperate in the following areas:

  • Development and promotion of research and development projects (RDP), on the programs and topics taking into account the mutual interest, specific conditions for enterprise development, the existing material and technical base, as well as available to them financial opportunities.

  • The increase of complexity of the raw materials processing with the production of new types of export goods, increase of production of the high-tech competitive products, the solution of environmental problems during the extraction and processing of mineral resources through the implementation and development of the new innovative technologies, scientific and technological design.

  • The creation of production facilities to increase the number of final redistribution aimed at the production of steel and its products for the domestic market needs followed by the focus on foreign markets.

  • Patenting issues solving, copyright and other rights of industrial and intellectual property created during the implementation of cooperation.

  • Preparation and distribution of joint print and electronic media, manuals, scientific and technical articles, etc.

  • Arrangement of exhibitions, conferences, symposiums, as well as joint participation and/or mutual representation at similar events.

 

Today, in the framework of the AMM-2011 a master class and a round table for the Top Managers have been held from the Congress Partner the “PricewaterhouseCoopers” Company.

 

 

For additional information, please contact:

 

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Astana: PR Manager Ainur Mukanova

Mobile: + 7 777 036 18 66; Office: +7 (7172) 24 06 56;

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Almaty: PR Manager Gulziya Asylbekova

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