Economic Development in Kazakhstan: The Role of Large Enterprises and Foreign Investment

By Anne E. Peck | Go to book overview

2

FOREIGN INVESTMENT AND INDUSTRIAL DEVELOPMENT PRIOR TO 1920

The Kazakh steppes and mountain ranges have long been known for their mineral wealth. Mines in the Altai mountains along the country’s north-eastern border with China and Mongolia were in use more than 4,000 years ago, since the beginning of the Bronze Age. The mines were well timbered, reaching depths of up to 100 feet, and were worked for tin, copper, gold, and silver (Meyer and Meyer 1936:275-6). Ultimately abandoned, they naturally deteriorated and became overgrown, unused until they were rediscovered in 1717. More generally, the remains of other ancient mine workings and crude smelters were reported to have guided Soviet geologists centuries later in their re-discovery of many mineral deposits, including those at Zhezkazgan, Maikain, and Tekeli (Daukeev 1995:1). The many caravan routes that crossed the country meant the riches were also known well beyond the Kazakhstan’s borders. For example, camel caravans arriving in the city of Samara brought copper from mines to the east in Karaganda and archeologists have speculated that the people who lived in the Samara Valley might have been active participants in the east-west copper trade since the late Bronze Age (Anthony and Brown 2001).

When reports of the existence of mines in the Altai Mountains reached Peter the Great, specialists were sent to explore, redevelopment began in 1727, and additional discoveries of both old and new mines were made. In 1784, the English mining overseer Philip Ridder, who worked for a Russian family developing mines in the northern Altai, discovered the rich lead and silver mines near Ust-Kamenogorsk which became known as the Ridder mines (Conolly 1967:46). The mines in Zyrianovsk were re-discovered in 1792 and those in Belousovsk in 1797. Mining expanded in the early nineteenth century when Siberian merchants bought mining properties in several more areas of Kazakhstan from local Kazakhs, generally for very small sums. The properties thus acquired included copper mines near Karaganda and Zhezkazgan and coal mines in the Karaganda basin. According to reports collected by Lansdell (1887:103) as he passed through the Semipalatinsk region in the early 1880s, 31 gold mines were in operation that produced more than 400 pounds of gold. And, although a copper

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