EEC extends duty-free imports for number of raw materials for titanium industry - Kazakh govt

ASTANA. March 4 (Interfax) - The Eurasian Economic Commission (EEC) has extended duty-free imports for a number of raw materials for industrial enterprises upon the initiative of Kazakhstan, the Kazakh government's press service said in a statement.

"The Kazakh delegation, led by Deputy Prime Minister Serik Zhumangarin, at the latest meeting of the EEC Council, supported extending duty-free imports to Kazakhstan for specific types of raw materials for the manufacturing industry. Starting this year, the area of tariff preferences has also included goods necessary for the country's electrical industry," the press service said.

Specifically, instead of the single customs tariff of 5%, the temporary zero duty has been extended for another two years to import titanium dioxide to Kazakhstan.

Titanium dioxide is utilized to produce titanium ingots and alloys, and the sole consumer in Kazakhstan is Ust-Kamenogorsk Titanium-Magnesium Plant (UKTMK), one of the world's largest titanium producers, which exports its products to the United States, the UK, France, Germany, and other countries.

"Titanium dioxide is not produced in Kazakhstan. UKTMK purchases it from foreign suppliers. The plant doubled utilizing raw materials in 2022 compared to 2021. The volumes are expected to grow, given that the plant's utilization is only 32% of available capacity today. The zero rate on the import customs duty instead of the five percent duty is expected to reduce the cost of finished products and increase production volumes," the press service said.

Another measure to support Kazakh manufacturers is the EEC Council implementing a zero duty rate on importing titanium scrap.

Utilizing titanium scrap as a raw material substantially increases output and reduces the cost of finished products. The plant ramped up consumption of titanium scrap 56% in 2022 compared to 2018. There are plans to boost import volumes to 600 tonnes in 2025-2026.

UKTMK's partners include Boeing, Airbus, Nippon Steel, Safran Aircraft Engines, General Electric, and others. UKTMK's largest shareholder is Belgium's Specialty Metals Holding Company with a 45.03% stake.