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OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
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DE RUEHTA #2124/01 3020832
ZNR UUUUU ZZH
O 280832Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3666
INFO RUCNCIS/CIS COLLECTIVE 0736
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0136
RUEHKO/AMEMBASSY TOKYO 0846
RUEHIT/AMCONSUL ISTANBUL 0063
RUEATRS/DEPT OF TREASURY WASHDC
RUEKJCS/JOINT STAFF WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
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RUCPDOC/DEPT OF COMMERCE WASHDC
RUEKJCS/SECDEF WASHDC 0214
RUEAIIA/CIA WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RHEFAAA/DIA WASHDC
RUEHVEN/USMISSION USOSCE 2020
RUCNDT/USMISSION USUN NEW YORK 1969
RUEHNO/USMISSION USNATO 2305
RUEHBS/USEU BRUSSELS

UNCLAS SECTION 01 OF 02 ASTANA 002124 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
STATE PLEASE PASS USTDA FOR DAN STEIN 
 
E.O. 12958: N/A 
TAGS: ECON EMIN BTIO TNGD KZ
SUBJECT: KAZAKHSTAN:  UST-KAMENOGORSK,S EASTERN MINING 
INSTITUTE SEEKS ADDITIONAL INTERNATIONAL COOPERATION 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (SBU) SUMMARY:  Poloff met on September 10 in 
Ust-Kamenogorsk with the Director of the Eastern Mining 
Institute, a largely self-financing research entity that had 
been part of a mining conglomerate during the Soviet era.  He 
discussed specific projects with international partners from 
Canada, South America, and Europe.  Eastern Mining's Director 
believes cooperation with Russia, Japan, and China is most 
critical to the Institute's future, but also expressed 
interest in expanding cooperation with U.S. enterprises.  END 
SUMMARY. 
 
OFF THE GOVERNMENT DOLE 
 
¶3.  (SBU)  Poloff met on September 10 in Ust-Kamenogorsk with 
Eastern Mining Institute Director Nikolay Ushakov, along with 
two of his deputy directors, Aleksandr Ananin and Viktor 
Shumsky.  The Eastern Mining Institute was formerly a 
research branch of a large Soviet mining conglomerate which 
encompassed mining concern Kazzinc and three other research 
institutes.  The Institute is now a largely self-financing, 
quasi-government entity with 250 employees.   According to 
Ushakov, direct government funding currently accounts for 
only a small percentage of Eastern Mining's budget; the 
Institute thus supports itself through the sale of its 
research, and from revenue streams from patents and 
joint-venture operations. 
 
NOSTALGIA FOR THE SOVIET ERA REMAINS 
 
¶4.  (SBU) Ushakov, who has been with the Institute for 37 
years, was clearly nostalgic for the reputation and network 
of connections that the Institute had enjoyed during the 
Soviet period.  He still has a map of the Institute's 
Soviet-era campus on his wall, and insisted on showing poloff 
which facilities the Institute "lost" after the USSR's 
collapse.  Ushakov pointed out that the remaining, smaller 
facilities were being thoroughly remodeled.  (NOTE:  While 
the Institute's facilities appeared to be adequate, they 
paled in comparison with the much more modern administrative 
buildings of Ust-Kamenogorsk's Ulba Metallurgical Plant, 
reported septel.  END NOTE.)  Ushakov said that he 
nevertheless welcomed the broadening of opportunities for 
research that the post-Soviet period provided.  He was 
bullish about the future, noting that Eastern Mining had 
successfully established a large variety of remunerative 
international joint ventures. 
 
GLOBALIZATION OPENS UP NEW HORIZONS 
 
¶5.  (SBU)  Ushakov reminded poloff that Kazakhstan has 
particularly rich deposits of aluminum, cadmium, gold, lead, 
nickel, and zinc.  Eastern Mining has been at the forefront 
of research in extraction techniques for these metals, for 
instance, in developing a technology for treating low-grade 
zinc.  Ushakov said that Eastern Mining is currently working 
intensively on hydrometry-related research, and is interested 
in U.S. experience in this field.  He noted that Deputy 
Director Shumsky's research has been translated into English. 
 Deputy Director Ananin mentioned that the institute was 
involved in successful projects in Bolivia, Canada, Germany, 
and Italy.  Ushakov explained that Eastern Mining has also 
cooperated with Kyrgyzstan on gold-extraction projects. 
 
LOOKING EAST TOWARD JAPAN ... 
 
¶6. (SBU) Despite good cooperation with countries throughout 
 
ASTANA 00002124  002 OF 002 
 
 
Europe and the Americas, Ushakov believes that Eastern Mining 
Institute's future lies primarily with Russia, Japan, and 
China.  Ushakov pointed out that many potential Russian 
partners had once been part of the same Soviet mining network 
as the Institute.  "Eastern Mining has a broad network of 
contacts with Russian firms and Russian partners pay 
attention to us," Ushakov explained.  Ushakov also discussed 
a very successful pilot program with Japan.  The Japanese, 
Ushakov related, had come to him with a proposal to cooperate 
on a "very specific technical issue," after having discovered 
that only two such projects had been carried out successfully 
before, one in Peru and the other in Kazakhstan.  Ushakov 
reported that the project yielded excellent results and 
"solid money," although he expressed some disappointment that 
it had not been larger.  He nevertheless hoped that project 
would lead to more cooperation with Japan. 
 
... AS WELL AS CHINA 
 
¶7. (SBU) Ushakov was particularly enthusiastic about the 
prospects for cooperation with China.  He explained that 
countries such as Canada, Germany, and the United States 
already have mature mining industries, and are not as 
interested as China is in expanding their mining operations. 
Consumption of mineral resources in China is currently much 
greater than production.  For example, China is one of the 
world's largest lead producers, but still needs to import 
lead because of high domestic demand.   Zinc, which is used 
extensively in construction, is another metal in great demand 
in China.  Ushakov said that last year he had met with 
Chinese officials and entrepreneurs who were preparing to 
build a new zinc factory.  Eastern Mining expects to sign a 
cooperative agreement with them by the end of 2008.  He noted 
that Eastern Mining has previously carried out successful 
joint projects with the Chinese University of Mining and 
Technology, the China Mining Institute, and the Chinese 
mining concern China Metallurgical Group. (NOTE:  China 
Metallurgical Group was part of a consortium with Jiangxi 
Copper that recently won an $808 million tender for 
Afghanistan's Aynak copper mine, beating out Kazakhstani 
copper giant KazakhMys.  END NOTE.) 
 
LOOKING FOR MORE U.S. PARTNERS 
 
¶8.  (SBU)  Eastern Mining is also interested in greater 
cooperation with the United States.  Ushakov mentioned that 
representatives of Canada-based Ivanhoe Mines, which is 
headed by American billionaire Robert Friedland, had visited 
Eastern Mining in conjunction with the development of gold 
deposits approximately 80 kilometers from Ust-Kamenogorsk. 
Ushakov recounted that on his last trip to the United States, 
he had met with representatives of U.S.-based FFE Minerals 
and successfully confirmed for them the results of a test 
Eastern Mining Institute had conducted.  Ushakov said he had 
made a presentation on a cutting-edge Eastern Mining project 
at an exhibition in Las Vegas, but the presentation failed to 
secure any new work.  Ushakov lamented that the Institute's 
location in Kazakhstan's remote far-eastern corner limits 
accessibility for visitors.  He complained that U.S. trade 
delegations visit Astana and Almaty, but not Ust-Kamenogorsk, 
and requested U.S. government assistance in finding 
additional American partners interested in cooperating with 
Eastern Mining Institute. 
HOAGLAND