KAZ Minerals

HIGH GROWTH – LARGE SCALE – LOW COST – FOCUSED ON COPPER

Inside a classroom at a school built through our charitable work

Our performance

Social investment

Social responsibility is one of the core aspects of our license to operate. The Group provides significant support 
to the communities in the more remote and less economically diverse regions of its operations including sponsorship, support and donations for community projects. We will continue 
to work with regional authorities in identifying projects that are relevant to our business while benefiting the communities to the greatest extent possible in the long term. Our main focus areas include healthcare, infrastructure development, childcare, education and sport.

Local economic development

The Group is one of the largest copper producers and amongst the largest industrial businesses in Kazakhstan. As such, we recognised our responsibility for the development of the local economies and local enterprise. KAZ Minerals is focused on ensuring that a high level of local procurement is maintained to support the development and growth of a diverse industry in Kazakhstan. We seek to prioritise local procurement and only use imported goods and services where there is no acceptable locally sourced alternative.

Revenue and tax transparency

The table below represents the Group’s consolidated report on payments made to governments under The Reports on Payments to Government Regulations 2014, which became effective for the first time for the year ended 31 December 2015. The report represents payments made in excess of £86,000 ($130,000) for activities related to the exploration, prospecting, discovery, development and extraction of minerals by project, by government type and by country, but rounded to the nearest million.

For the year ended 31 December 2015, total payments to governments under the regulations amounted to $127 million, while total contributions made which includes payments not covered by the regulations, amounted to $195 million and are reflected in the table below.

$ million

Corporate income taxes

Mineral extraction tax

Withholding tax

Licence fee

Social payments

Total payments to governments per regulation

Employer’s payroll taxes

Property taxes

Environmental taxes

Employees’ payroll taxes

Customs and duties

Other1

Total
By country
Kazakhstan 34 57 12 1 15
119
16 4 2 22 16 1
180

United

Kingdom

6
6
1 4
11
Kyrgyzstan  
1
1 1 1
4
 
40
58
12
1
15
126
18
4
2
27
16
2
195
By project
                         
Artemyevsky 16
16
2 2
20
Irtyshsky 7
7
1 1
9
Orlovsky 25
25
1 2 1
29

Yubileyno-

Snegirikhinsky

5
5
1
6
Other 30 1 11
42
4 2 2 5
55
East Region
30
53
1
11
95
8
2
2
11
1
119
Aktogay 3 2  – 1 1
8
1  –  –  – 1 11
21
Bozshakol  – 2  –  – 3
5
2  –  –  – 2 4
16
Bozymchak  – 1  –  –  –
1
1  –  –  – 1  –
4
Koksay  –  – 11  –  –
11
 –  –  –  –  –  –
11
Other 7  –  –  –  –
7
6 2 2  – 11  –
24
 
40
58
12
1
15
127
18
4
2
26
16
2
195
By type
State 40 57 13 1   –
112
2   –   – 5 16   –
135
Local   – 1   –   – 12
13
16 4 2 21   – 1
57
Other   –   – (1)   – 3
2
  –   –   –    –   – 1
3
 
40  
58
12
1
15
127
18
4
2
26
16
2
195

1 Includes payments for the land, water usage and other similar taxes.

The were no signature bonus payments made during the year ended 31 December 2015.

Social payments of $15 million represent payments made to bodies, associations, trusts and other public interest groups located in the regions in which the Group operates and are reflected by mining licence where applicable. These payments include the transfer of assets at their book value, which the Group regards as social payments as these benefit the local communities.

The main social payments made during 2015 relate to the construction of a haematology centre ($3 million), the transfer of a cultural centre ($3 million), construction of roads ($3 million) by the East Region operations and the development and repair of residential infrastructure ($3 million) by Bozshakol.

Resettlement

Our approach is guided by the subsoil law, which requires us to stop operations that pose a safety risk to the communities. Where there is no alternative to continue or commence operations without disturbing local population, we are required to manage the resettlement process. Our goal is to minimise the adverse impact of our activity on local communities.

We currently have one major growth project under construction – Aktogay, with another, Koksay, at scoping stage. Both are greenfield projects, and although they are located in remote scarcely populated areas, we took any possible disturbance our operations or the necessary new infrastructure could cause into account during the feasibility stage. Our existing operations plan mining and production activities accordingly and resort to resettlement only where it is unavoidable.

There are currently no on-going or known near to mid-term resettlement requirements across our operations.