Construction of a new mining and metallurgical complex for processing of primary gold ore is nearing completion in the Akmola Region. The production capacity of the complex, where the first gold is planned to be extracted as early as in September, will be 5 million tons of ore per year.
In 2020, the Kazakhstani gold mining company RG began the construction of a mining and metallurgical complex and ancillary infrastructure in two districts of the Akmola Region – Burabay and Bulandy, in close proximity to the North and South Raygorodok deposits, where a project for the production of gold by heap leaching is successfully operating.
Verny Capital Group of Companies acquired the Northern and Southern Raygorodok deposits in 2014, creating the RG Gold company. In December 2018, the American private equity fund Resource Capital Funds became the second shareholder in the project, buying a 35 percent stake in RG Gold. Investments in increasing production, reserves and resources in the amount of 144 billion tenge made it possible to increase the deposit mining term by 20 years with a significant increase in production. Gold reserves were quadrupled (up to 108 tons), production volumes were tripled, turning Raygorodok into the largest mono-gold deposit in the country.
Heap leaching technology allows the company to process about 2.2 million tons of ore. At the end of 2021, the company produced about 1,200 kilograms, or approximately 40,000 ounces of pure gold, which is higher than the figures of previous years.
The launch of the MMC with a capacity of 5 million tons of primary ore per year will make it possible to increase the production of pure material to 1,500-1,600 kilograms if the start of production taken for calculation is September-October 2022. With two production facilities, RG Gold plans to produce over 6,000 kilograms of gold in 2023, entering the top league among the producers of precious metals.
In the process of seeking funding for a project to build a mining and metallurgical complex, proposals from several international banks, including DBK, EDB, EBRD and others, were considered. Almost every major industrial project in Kazakhstan over the past 10 years has been implemented with the participation of borrowed funds from these institutions, thanks to which a number of modern industrial enterprises and industries have been formed.
The choice in favor of DBK was made on the basis of availability of the necessary borrowed funds and the interest rate on them. The terms of DBK’s loan to RG Gold are market-based and in line with international practice, starting from interest rate to equity/debt ratio.
The MMC construction project is estimated at 424 million dollars, 30 percent of which is financed at the account of own funds of the company’s shareholders. For the remaining $297 million, a loan was issued by the Development Bank of Kazakhstan for a period of 9 years and at an interest rate of 4.1 percent in dollars and 9 percent in tenge.
According to CEO of the RG Gold group of companies Lawrence Rossouw, construction is proceeding according to the schedule, despite all the logistical difficulties and additional costs caused by the COVID-19 pandemic and the geopolitical situation.
“The equipment is currently being installed, and commissioning is scheduled for August. I would like to note that we have purchased the most modern equipment for the new enterprise. Mostly locally produced materials were used in the construction of the complex.” When recruiting personnel, the company also gives preference to local specialists.
“To launch a new factory, it is difficult to find ready-made personnel who know all the intricacies of this technological process. Therefore, all our new employees underwent special training courses at other similar manufacturing enterprises throughout Kazakhstan. At the beginning, we recruited personnel at the level of managers and engineers; at the second phase of preparation, recruitment at the level of operators was organized, also with pre-training, training and opportunities for further growth. As for the foreign workforce, we invited several engineers to transfer experience.”
Currently RG Gold employs more than 1,000 people, to whom the company provides decent wages, a social package and opportunities for professional development.
A rotational village for another 600 people is being built right next to the mining and metallurgical complex – the work is 90 percent completed. In the next two years, houses for supervisors and senior specialists will be built in the village of Nikolayevka.
The company understands the importance of long-term social investments and has been providing educational grants for graduates of the Burabay district for several years. The grants include tuition at Narxoz University, dormitory accommodation and a monthly stipend. In 2022, the company also launched a grant programme for studying mining professions at Kazakhstani universities – graduates of schools in the Akmola Oblast and children of company employees can participate in the programme. Supported by RG Gold, in recent years schools in the villages adjacent to the mine were equipped, the Shchuchinsk-Nikolaeyvka road was repaired, and the park was landscaped.
It is natural that the local population is concerned about the aspects of compliance with environmental standards in the development of subsoil. MMC designers were able to comply with all key standards of both local and international environmental legislation.
“Our project turned out to be very conservative, with a large margin in terms of safety. This entailed an increase in costs of up to 40 percent, but this was necessary in order to make sure that we adhere to all international standards and requirements. The principle that our company follows is a zero level of emissions into the environment. Everything that we have in the waste now, everything goes to the tailings with the appropriate preliminary treatment and neutralization.
We ourselves stand for ethical business conduct and listen to the opinion of local residents, we try to take into account their needs so that the population benefits from the deposit,” noted Lawrence Rossouw.
