Kazakh Producers Chasing Russian Asbestos Markets
The Russian invasion of Ukraine continues to shock the civilized world. According to United Nations figures, at least 25,000 Ukrainians have been killed, many more injured and millions sent into exile.1 The disruption caused by the conflict has caused economic chaos, civil unrest and political turmoil around the world. With the imposition of trade sanctions on Russian businesses, former transport channels have been blocked not just for the aggressor but for others who used their ports. A case in point is the situation faced by Kostanay Minerals JSC,2 Kazakhstans sole chrysotile asbestos conglomerate, which had until the outbreak of the 2022 war sent its exports via the Russian ports of Novorossiysk on the Black Sea and St. Petersburg on the Baltic Sea.3
Just like the Russian asbestos producers Orenburg Minerals and Uralasbest Kostanay sends the vast majority of its output of chrysotile (white) asbestos abroad.4 By March, 2022 shipments had dwindled from the usual 22,000 tonnes (t) to 10,000t per month. With full warehouses, Kostanay stopped production.5 Within months, however, new logistical channels had been developed. An agreement reached by Kazakhstan with Azerbaijan and Georgia, saw the opening of a route through the Georgian port of Poti. A new rail-sea combined transport train from Dunhuang, in western China, which began operations in spring 2022 provided direct connections to Vientiane, Laos and Bangkok, Thailand. At the end of August (2022), 41 containers of Kazakh chrysotile asbestos which had been delivered to Xi'an a large city in Shaanxi Province in Chinas northwest via the China-Europe freight train service were transported by train to Hanoi, Vietnam; the new rail link reduced delivery times from 20 to 8 days.6 At last report, Kostanay exports were back to pre-war levels and the problem was no longer lack of export capacity but shortage of Kazakh chrysotile asbestos.
According to Kostanay Chairman Yerbol Nurkhozhaev, demand for Kazakh chrysotile is increasing:
Russian chrysotile has disappeared in most of the markets. This is due both to the political situation and to the sanctions imposed against Russia. As a result, the demand for our product has grown We are thinking of introducing a third shift at the factory, adding jobs in the mining and transport complex. This will give an increase in production up to 30-40 thousand tons per year.
There is no question that the Kazakhs are moving in on Russian territory. In recent months, attempts to stop the Ukraine Parliament from enacting legislation banning asbestos have been spearheaded by Kazakh officials, including Kazakhstans Ambassador to Ukraine Darkhan Kaletayev and the Kazakh Minister of Trade and Integration Bakhyt Sultanov.7 Describing his participation in the 14th meeting of the International Commission on Economic Cooperation in Kyiv on June 18, 2021 Kazakh Minister Sultanov did not mince his words when he said that a Ukraine ban on asbestos, would hurt our [asbestos] exporter Kostanay Minerals. According to Kostanays Chairman, at the June 2022 meeting of the United Nations Rotterdam Convention it was, for the first time, the Kazakh delegation that led the veto on proposals to categorize chrysotile as a hazardous substance with Russians taking a backseat.8
Global asbestos trade data has always been little more than guestimates as data was supplied by governments, some of which were themselves asbestos industry stakeholders. It is impossible to know with certainty how much asbestos is nowadays being exported from Russia. An article uploaded this summer about the economic situation in the Orenburg region home to Russias biggest asbestos producer: Orenburg Minerals noted that: In the current difficult economic conditions, sales volumes of JSC Orenburg Minerals decreased five times.9 Anecdotal reports from colleagues in Asia say shipments from Russia are getting through. It was interesting, however, to see a September 5, 2022 article which reported findings by Yernar Serik, an expert from the Kazakh Institute for Economic Research, remarking that the region's exporters have discovered asbestos markets in Indonesia.10
The void left by the logistical difficulties being experienced by Russian exporters has left a huge vacuum in the global supply chain. In 2020, of the 1,100,000t of chrysotile asbestos produced worldwide, Kazakh and Russian output was respectively 227,400t (21%) and 720,000t (65%). In the short-term there is no way that Kazakhstan can fill this gap. One can but hope that by the time Russian chrysotile asbestos exports flow again, that many of their customers will have transitioned to asbestos-free technology.
September 6, 2022
2 According to its website, the Kazakhstan company Kostanay Minerals JSC is a mining company specializing in the extraction of chrysotile asbestos and the production of chrysotile fiber. The company is the worlds leading manufacturer and exporter of chrysotile asbestos, one of the most important elements used in the global industry.https://km.kz/en/%D0%B3%D0%BB%D0%B0%D0%B2%D0%BD%D0%B0%D1%8F-english/
4 According to data released by Kostanay Minerals, of the 227,300 tonnes (t) of chrysotile produced in Kazakhstan in 2200, 221,000t (97%) were exported.
Сколько хризотила экспортировал Казахстан в 2020 году [How much chrysotile did Kazakhstan export in 2020]. February 2, 2021.
5 Как горнодобывающие предприятия, экспортирующие продукцию, пытаются удержаться на плаву
[How mining companies that export products are trying to stay afloat]. May 10, 2022.
6 New freight train route links Vietnam with north-west China's Shaanxi. August 26, 2022.
Trung Quốc khai trương chuyến tàu hàng từ Tây An sang Việt Nam [China opens freight train from Xi'an to Vietnam] August 24, 2022.
7 Kazan-Allen, L. The Fight for Ukraine Sovereignty over its Asbestos Policy. September 20, 2021.
8 Observers attending the UN meeting disagreed, saying the Russians were, as always, orchestrating the pro-asbestos bloc.
Russia violates Fundamental Right to a Safe and Healthy Working Environment. June 15, 2022.
9 ПРЕДПРИЯТИЯ ОРЕНБУРЖЬЯ НАХОДЯТ НОВЫЕ РЫНКИ СБЫТА [ENTERPRISES IN THE ORENBURG REGION FIND NEW MARKETS]. August 3, 2022.
10 На 14% снизился объём экспорта Костанайской области [The volume of exports of Kostanay region decreased by 14%]. September 5, 2022.