Kazakhstan and China Join Forces to Build a Major Steel Plant in Zhambyl Region
On February 27, 2025, a landmark agreement between Kazakhstan’s Prime Minister Olzhas Bektenov and the Chairman of Fujian Hengwang Investment, Zeng Zhaoqiang, marked the beginning of a collaborative effort to construct one of the largest metallurgical plants in Kazakhstan. The facility will be located in the Jibek Joly Special Economic Zone within the Zhambyl Region. The $1.2 billion investment is set to bolster Kazakhstan's steel production capacity by producing 3 million metric tons of steel annually once fully operational.
This major project is a direct outcome of discussions during the Kazakh-Chinese investment roundtable held in November 2024, coinciding with Prime Minister Bektenov’s official visit to China. This agreement signifies a key turning point in Kazakhstan's industrial strategy, aiming to strengthen its metallurgical sector and enhance its position in the global steel market.
Project Phases: Construction Timeline and Capacity Goals
The steel plant's construction will take place in two distinct phases, with the initial phase set to break ground in April 2025. In the first phase, the plant will have an initial capacity to produce 1 million metric tons of steel per year by 2027. This will be made possible by an initial investment of 160.2 billion tenge (approximately $318 million), which will fund the construction and development of facilities for the first phase of operations.
The second phase of the project, which will be completed by 2029, will increase the plant’s capacity to its full potential of 3 million metric tons annually. This will require an additional investment of 312.8 billion tenge (around $621.1 million). The phased approach will allow the plant to gradually ramp up its production and ensure a smoother transition as production scales up to meet international demand.
Investment and Job Creation: Economic Impact for Kazakhstan
This project is expected to create significant economic value in the Zhambyl Region and across Kazakhstan. The $1.2 billion investment from Fujian Hengwang Investment will not only fund the construction of the plant but will also generate 2,500 direct and indirect jobs for local workers. This is a substantial contribution to the region’s economy, which will benefit from the creation of new employment opportunities in the steel production, mining, and construction sectors.
As the plant expands its capacity over the coming years, additional employment opportunities will arise in areas such as manufacturing, logistics, and maintenance. The development of this facility will further support Kazakhstan's goal to diversify its economy and reduce reliance on traditional sectors like oil and gas.
Utilizing Local Resources and Technological Advancements
One of the unique aspects of this project is its emphasis on utilizing local resources. The plant will rely heavily on Kazakhstan's domestic raw materials, which will help reduce costs and increase sustainability in production. Iron ore sourced from Kazakhstan’s Karagandy, Kostanai, and Ulytau regions will form the backbone of steel production, while lime and natural gas will also be sourced locally. By tapping into these abundant resources, the steel plant will help foster the growth of Kazakhstan’s mining and raw material extraction industries.
To further enhance the competitiveness of Kazakhstan’s metallurgy sector, the plant will incorporate Direct Reduction Iron technology, which is a cutting-edge process for producing high-quality steel. This technology will enable the plant to produce a diverse range of steel products, including wire rods, reinforcement bars, strip steel for pipe production, and angle and profile steel. These products are essential for both domestic infrastructure projects and export markets.
Energy Requirements: Building a 350 MW Gas Turbine Power Plant
A key element of the project’s second phase will be the construction of a 350-megawatt gas turbine power plant. This power plant is essential for meeting the energy demands of the steel production facility. The construction of the gas turbine power plant will require an additional 201.3 billion tenge (approximately $399.7 million), ensuring that the plant has a sustainable and reliable power source to meet its energy needs.
This gas turbine power plant will be a crucial component of the project, providing energy to run the steel plant efficiently. By integrating this energy infrastructure, the project will help ensure that the plant operates in a sustainable and cost-effective manner, reducing reliance on external power sources and supporting Kazakhstan’s energy security.
Government Support and Strategic Economic Growth
Prime Minister Olzhas Bektenov highlighted the strategic importance of this project for Kazakhstan’s metallurgical industry. The government has pledged its full support for the project, committing to provide necessary assistance throughout the construction and operational phases. This backing underscores Kazakhstan's broader economic objectives to increase the export potential of the country, diversify its industrial base, and position itself as a regional leader in steel production.
The steel plant will contribute directly to Kazakhstan’s industrialization strategy, providing the country with the infrastructure and technology required to compete in the global steel market. By utilizing local resources, creating jobs, and applying advanced technologies, this project is poised to bring about long-term benefits for Kazakhstan’s economy and its position on the global stage.
Strategic Implications for Kazakhstan-China Relations
This steel plant project represents a significant milestone in Kazakhstan's efforts to strengthen economic ties with China. The Kazakhstan-China relationship has been marked by increasing cooperation in areas such as energy, infrastructure, and industrial development, and this project is another example of the growing collaboration between the two countries. As China continues to expand its influence in Central Asia, Kazakhstan stands to benefit from this partnership, both economically and strategically.
By leveraging China’s expertise in steel production and Kazakhstan’s rich resource base, this project will provide both nations with opportunities for growth and collaboration in the global metallurgical and manufacturing industries. The steel plant is just one example of the long-term economic integration between the two countries, positioning Kazakhstan as a central player in the region's economic future.
Kazakhstan’s Future in the Global Steel Industry
Once fully operational by 2029, the Zhambyl steel plant will become a cornerstone of Kazakhstan's industrial development. By producing high-quality steel at scale and leveraging local raw materials and advanced technology, the plant will enhance Kazakhstan’s competitiveness in the global steel industry. This project also supports the country’s ambitions to become a key player in Central Asia’s steel production and an important supplier in the global steel market.
Kazakhstan’s broader strategy is to diversify its economy, and the development of this state-of-the-art steel plant is an important part of this process. The country’s ability to produce cost-competitive, high-quality steel, coupled with its abundant natural resources, will help position it as an industrial powerhouse in the coming decades.
Key Takeaways:
• Kazakhstan and China are jointly building a $1.2 billion metallurgical plant in Zhambyl Region, capable of producing 3 million metric tons of steel annually.
• The plant will be constructed in phases, with 1 million metric tons of production expected by 2027 and full capacity achieved by 2029.
• The project is expected to create 2,500 jobs in the Zhambyl Region, providing economic benefits to local communities.
• Local raw materials, including iron ore, lime, and natural gas, will be used in the production process, reducing costs and promoting sustainability.
• A 350-MW gas turbine power plant will be built to provide energy for the plant, ensuring sustainable and efficient operations.
• The project will significantly enhance Kazakhstan’s export potential and strengthen its metallurgical industry, positioning the country as a global steel producer.
• The Kazakh government has expressed full support for the project, reflecting its commitment to industrial development and economic diversification.
• The partnership with Fujian Hengwang Investment underscores Kazakhstan's growing ties with China, which will help further the country’s economic ambitions in the global marketplace.
This partnership represents a transformative opportunity for Kazakhstan's economy, marking a new era of industrial development, job creation, and global competitiveness in the steel industry.
