VLADIMIR KIM Chairman of Kazakhmys

h my God, such a hole in the ground!” Dennis Price could scarcely believe his eyes. As a mining engineer, he had never seen an open pit mine as large as Bogatyr Access Komyr (BAK). Privatized by Access Industries in 1996, the largest coalmine in the world is in Kazakhstan. Shortly after seeing Bogatyr, Mr. Price became its General Director.

“I saw where the mine could go and how it could develop,” he says. Size and volume were not the only factors involved. Mineral prices have spiraled in the last five years, reviving pits where conveyor belts had stopped turning. The key driver of growth is the intensive use of raw materials in China. “There’s an unprecedented boom in the global mining industry. Equipment manufacturers can’t produce machinery fast enough,” says Mr. Price.

Kazakh miners were hard hit by the breakup of the Soviet Union in 1991, with as many as 40,000 quitting coal towns in search of jobs. By 1998, virtually the entire sector was privatized. Foreign managers replaced the Soviet machinery and upgraded technology. Inefficient linkages to distant processing centers were eliminated. The government also streamlined procedures for obtaining permits and stiffened the legal code.

The result was an increase in output. Today, mining accounts for 30 percent of Kazakhstan’s export earnings and 19 percent of industrial production. According to statistics, 95 percent of the elements in Mendeleev’s periodic chart can be found here. From desert plateaus to mountain tundras, the country is home to 29 non-ferrous metals, three ferrous metals, two precious metals and 84 industrial minerals, and Kazakhstan has over 36 million tons of copper.

“The main engine for the development of copper is organic growth,” says Vladimir Kim, Chairman of Kazakhmys. Copper prices have reached historic peaks and the high returns are being reinvested in development projects. Kazakhmys exports 85 percent of its cathodes and rods to China. Since 2004 it has been listed on the London Stock Exchange. It is also among the big players in the FTSE100. “We don’t know if China will need copper in ten years, but we do know that it will be among the biggest consumers of everything,” says Mr. Kim.

With China’s rapid urbanization, Kazakh copper output could triple by mid-century. The country is now the world’s tenth largest producer, but spinning off new products will broaden the market share.