Kazakhstan’s mining sector is booming just as the country’s water supply is coming under increasing stress from climate change, antiquated infrastructure and a growing population.

Water supply will be vital to the sector’s long-term success, yet the issue is all too often overlooked by governments and investors, experts say, The Caspian Post reports via Eurasianet.

“Water scarcity in Central Asia is discussed almost entirely as an agricultural problem … it rarely appears in mining company risk registers,” Vlad Paddack, an analyst at Nightingale Int., a consulting firm, told a panel at the Minex Kazakhstan ’26 forum in Astana in April.

The Kazakh government sought to address the issue by introducing significant revisions to the water code in 2025, but industry insiders say that the success of those changes will hinge on enforcement, which has previously been light.

The mining sector has grown robustly in Kazakhstan over the past few years. Ore production increased by 7.8 percent and metal production expanded by 6.9 percent in 2024, Kazakh officials have stated. Astana hopes to see that growth continue, and the sector has recently attracted much attention from Western governments eager to diversify their supply of critical minerals and rare earths.

At the same time, a study published this winter found that glacier mass in Central Asia could decline by one-third by 2040, with runoff peaking a decade later. A recent UN Development Programme report found that Kazakhstan could face a water shortage equal to 50 percent of its need for business and household use by 2040.

Water is vital for mining, especially during the early stages of processing when the ore is separated out from unwanted minerals and dirt.

In water-stressed regions, water can run between 10 and 20 percent of a copper or iron mine’s total costs, according to Paddack.

It is difficult to say exactly how much water the country’s mining sector uses because official water-use statistics are aggregated for the entire industrial sector, said Zauresh Atakhanova, who studies the economics of Kazakhstan’s extractive sectors at Nazarbayev University in Astana.

However, she and her colleagues studied water use data from one, relatively new copper mine (the mine gave the researchers data in exchange for anonymity).

The operation effectively prevented water contamination and recycled 84 percent of the water it used. However, its water use still represented 1.5 percent of total withdrawals by the country’s extractive industries and was growing by about 10 percent annually, the researchers found.

“Of course there are benefits of having a mining boom, but at the same time, there are serious threats that the boom can bring,” Atakhanova told Eurasianet in an interview.

Another key factor is that water is basically free for industrial users in Kazakhstan, with prices between four and 10 cents per cubic meter in 2023, according to the study. The global average is between $2.50 and $3 per cubic meter.

“A lot of these problems, they are kind of inherited from the Soviet times’ way of thinking - that natural resources are a kind gift of nature, and as a result they have to be free,” Atakhanova said.

The best way that mines can reduce their water use is through better management of tailings, mine-speak for the unused minerals separated from the ore in processing, Paul Klimczak, a hydrologist with consulting firm SLR, told a Minex panel.

The tailings are removed in a slurry, which is often mostly water, and stored in a tailings pond at the mine. Mining operations are capable of reducing the water content in slurry, covering or reducing the size of their ponds to reduce evaporation and recycling more of their water, Klimcsak said.

But all of that costs money.

Kazakhstan is pushing miners to spend it with the new water code, which will be phased in over a five-year span starting next year. The code requires industrial users to adopt water-saving technology and ups penalties for violations.

“We’re seeing a lot of positives in the new legislation, but we’re not really seeing it transitioning onto the ground yet,” said Mark Raynor, a hydrologist for consulting firm SRK who has worked in Kazakhstan since 2006.

While new mines have been implementing some water saving technology, water code enforcement remains weak, he said. Most mines in the country are “massively water inefficient” with tailings ponds like “Lake Superior,” Raynor told Eurasianet on the sidelines of the conference.

Established mines have “been operating the same way for 50 years, and they’re not open to the idea of change,” he said.

Reductions in water use will have to come to the sector sooner or later, said Paddack, the risk analyst. Miners should plan for a drier future now to avoid running low on water later, or having their taps shut off by governments under pressure during severe shortages, he said.

“The primary risk is not cost. It’s supply. You can find alternatives when energy prices rise,” Paddack said. “But you cannot make water. If its supply is interrupted at scale, operations stop.”

By Alexander Thompson