If all you knew about Kazakhstan stemmed from “Borat,” you’d likely be skeptical about the country’s growing status as an emerging, frontier market.  After all, the only thing the movie’s protagonist seemed truly proud of concerning his homeland was his older sister Natalya’s status as “number four best prostitute.”  Charming.  But now, writes Bruce Pannier, “more than a decade and a half after the Soviet Union collapsed, Kazakhstan is emerging as a regional power in at least several areas. The money from its oil industry, just now starting to produce in large quantities, gives Astana the kind of revenues that its Central Asian neighbors can hardly imagine.  Its banks are among the region’s pioneers in tapping foreign stock markets.  [And] Kazakhstan is also investing in other countries in Europe and Asia, but also closer to home in Kyrgyzstan and Tajikistan, where Kazakh companies own shares in banks and various industries.”  Thus, while Kazakhstan still needs and solicits large-scale FDI for its own needs, including transport, pipelines and energy infrastructure, the Central Asian nation has started buying into foreign energy-related ventures.

“Borat” jokes aside, many experts echo Pannier’s words and now describe the sprawling country as one of the most mature economies in Central Asia, and a stable nuclear partner.  In fact, Greg Vojack, a managing partner with law firm Bracewell & Giuliani in Kazakhstan, opined that Kazakh companies are “coming of age and expanding globally.”  The key to the relatively sudden boom thus far can be summed up neatly: Uranium.  Kazakhstan contains the world’s second-largest uranium reserves, estimated at 1.5 million tons, and is the world’s No. 3 uranium miner, exceeded only by Australia and Canada (the three countries account for more than half of global uranium production).  In 2006, uranium production increased 21 percent, and in 2007 that rate accelerated over 30 percent to roughly 7,000 tons, according to the country’s Energy and Mineral Resources Ministry.  Most analysts now predict that Kazakhstan will soon become as vital a contributor to the global uranium market as it is in oil.  And while uranium prices have increased over 1,000 percent since 2001 to over $100 a pound (specifically, demand and extended weather-related closures at key uranium mines in Australia and Canada tripled uranium prices in the past year to about $120 a pound), there is not necessarily any immediate ceiling.  Australia’s Macquarie Bank’s stock-broking division, for example, projects that by 2009 uranium prices will rise to $200 a pound. Driving uranium prices upward are record-high oil prices and rising demand for the fuel, particularly from Asia. South Korea relies on nuclear energy to produce 45 percent of the country’s electricity, and Japan is not far behind, relying on nuclear power for 30 percent of its energy needs.

China and India are also quite keen on nuclear energy.  China’s Commission of Science Technology and Industry for National Defense has stated that China will “prospect for and develop indigenous uranium deposits in order to expand the nation’s ability to produce 40 gigawatts of nuclear power electrical generating capacity by 2020.”  China is also developing a national uranium reserve to commence in 2010. A UPI wire story from August 2007 noted as well that “nuclear power accounts for just 1.4 percent of China’s electrical power generation,” and that “despite Beijing’s ambitious attempts to expand uranium production in Xinjiang and elsewhere, local sources will be insufficient to meet domestic needs; analysts predict that within less than a decade China’s planned nuclear power reactors will consume 44 million pounds of uranium annually, as more than 16 provinces, regions and municipalities have announced intentions to build nuclear power plants within the next eight years–a total of 77 planned and proposed new reactors.”  As for India, nuclear power accounts for roughly 3-4 percent of the country’s power needs, and the government has 19 planned and proposed nuclear power reactors.

In 2002, Kazakhstan became the first of the former Soviet states to receive investment-level credit rating, and has been courting foreign investment ever since, especially in regards to mining.  The world’s leading producer of uranium oxide, Canada’s Cameco, has a 60-percent share in Kazakhstan’s Inkai uranium mining operation, while the state run energy firm, Kazatomprom, the world’s fourth-largest producer, also has a stake in Inkai. Founded in 1997, Kazatomprom reported assets of $1.6 billion in 2006, and last year announced plans to increase its uranium output sixfold to 18,000 tons per year by 2012.

Kazakhstan has also done a commendable job of keeping the great big bear (Russia) at bay.  ” As with its oil and gas reserves,” the UPI noted, “Kazakhstan has adroitly maneuvered to lessen its dependency on Russia by diversifying its partners and markets.”  Specifically, in April 2005 South Korea and Kazakhstan established a joint mining venture for uranium, (with operations set to commence this year) with an projected annual output of 1,000 tons.  And one year later Kazakhstan and Japan signed a civil nuclear cooperation agreement under which Japan was to import 30 percent of annual uranium needs of 9,500 tons for power generation from Kazakhstan.  Other foreign companies investing in Kazakhstan’s uranium industry include Canada’s SXR Uranium One Inc., Japan’s Marubeni Corp., China’s Guangdong Nuclear Power Group, Britain’s New Power Systems Ltd. and the U.S. uranium trading company Nukem.  These deals are “a way to shore up partners other than Russia for [Kazakhstan] nuclear-related industry,” observes Vojack.

How to play Kazakhstan from the comforts of your own home?  How about with what Winston Kotzan describes as “the Borat trade”?