Kazakh metal workers' town thrives on booming demand

Kazakh metal workers' town thrives on booming demand

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On the surface, the Kazakh town of Aksu looks like a Communist stereotype. Its metals factory is the world's biggest and for generations it has provided residents with employment, healthcare, education and leisure.

But there's a crucial difference. The Eurasian Resources Group factory is controlled by three billionaires and though the Kazakh government also has a stake it's a far cry from the Communist model of ownership by the proletariat.

. Aksu, Kazakhstan. Reuters/Shamil Zhumatov
Eurasian Resources Group's (ERG) Aksu Ferroalloys Plant.

The trio are Alexander Machkevich, Alijan Ibragimov and Patokh Chodiev and many Kazakhs see them as oligarchs close to President Nursultan Nazarbayev who has ruled since 1989.

Nazarbayev, a former Soviet apparatchik, wields sweeping power and parliament is devoid of opposition. A pro-Nazarbayev political party bankrolled by ERG's cofounders was founded in 1998 and merged with the president's Nur Otan party in 2006.

None of the three billionaires are native Kazakhs, though all are from Central Asia. They started their careers as commodities traders and took over Kazakh mining and metals assets during privatisation.

. Aksu, Kazakhstan. Reuters/Shamil Zhumatov
Interior of Eurasian Resources Group's (ERG) Aksu Ferroalloys Plant.

These days one in five of Aksu's 50,000 residents works at the factory and it is a model for the country's state-sponsored capitalism under which tycoons are responsible for the welfare of "mono towns" that depend on their business.

Founded in the 19th century as a river wharf for nearby coal deposits in northeastern Kazakhstan, Aksu became an industrial hub in the 1960s when Soviet planners designated it as a location for a power plant and a ferroalloys smelter.

. Aksu, Kazakhstan. Reuters/Shamil Zhumatov
A worker looks at a molten ferroalloy ladle at Aksu Ferroalloys Plant.

Both the plant and the smelter were privatised in the 1990s after Kazakhstan gained independence from the Soviet Union and became part of ERG's Central Asian mining and metals assets.

Petr Smotrich has worked as a furnace operator at the smelter for 40 years. He met his wife Galiya there. She works as an administrator and their son Dmitry and daughter Irina also work at the same smelter.

. Aksu, Kazakhstan. Reuters/Shamil Zhumatov
Petr Smotrich stands in his kitchen with his eight-year-old granddaughter Dana.

"The smelter keeps working and therefore we have confidence in our future," he says.

Ferroalloys are used in steelmaking and the Aksu Ferroalloys Plant - as the smelter is known officially - sells the bulk of its products to China, Japan and Russia.

The smelter avoided the fate of many ex-Soviet industrial giants in the 1990s that went bankrupt and laid off staff, though at one point it reduced workers shifts to three per week, Smotrich says.

The town has avoided the post-Soviet collapse too, Smotrich said.

. Aksu, Kazakhstan. Reuters/Shamil Zhumatov
A man lifts weights at a sports complex at the Aksu Ferroalloys Plant.

"There is a street gym in every yard," Smotrich says.

ERG, which is boosting exports of ferroalloys, says it has spent hundreds of millions of tenge currency, or millions of dollars, on social infrastructure such as a stadium and a swimming pool.

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Slideshow

A teacher listens to a student during an electrician class lesson at a college of ferrous metallurgy.
. Aksu, Kazakhstan. Reuters/Shamil Zhumatov

A teacher listens to a student during an electrician class lesson at a college of ferrous metallurgy.

A melting furnace with a sign reading: "Do not throw paper, rubbish into the furnace, gas cleaning works!"
. Aksu, Kazakhstan. Reuters/Shamil Zhumatov

A melting furnace with a sign reading: "Do not throw paper, rubbish into the furnace, gas cleaning works!"

Bakhytbek Mukanov, a smelter with 30 years experience, adjusts his gear.
. Aksu, Kazakhstan. Reuters/Shamil Zhumatov

Bakhytbek Mukanov, a smelter with 30 years experience, adjusts his gear.

A furnace is seen inside Eurasian Resources Group's (ERG) Aksu Ferroalloys Plant.
. Aksu, Kazakhstan. Reuters/Shamil Zhumatov

A furnace is seen inside Eurasian Resources Group's (ERG) Aksu Ferroalloys Plant.

Interior of Eurasian Resources Group's (ERG) Aksu Ferroalloys Plant.
. Aksu, Kazakhstan. Reuters/Shamil Zhumatov

Interior of Eurasian Resources Group's (ERG) Aksu Ferroalloys Plant.

A woman walks with her child in a playground in the centre of the town of Aksu.
. Aksu, Kazakhstan. Reuters/Shamil Zhumatov

A woman walks with her child in a playground in the centre of the town of Aksu.

People walk past Soviet-era statues, mostly of Soviet state founder Vladimir Lenin.
. Aksu, Kazakhstan. Reuters/Shamil Zhumatov

People walk past Soviet-era statues, mostly of Soviet state founder Vladimir Lenin.

A tractor transports hay past Aksu Ferroalloys Plant.
. Aksu, Kazakhstan. Reuters/Shamil Zhumatov

A tractor transports hay past Aksu Ferroalloys Plant.

Children play football.
. Aksu, Kazakhstan. Reuters/Shamil Zhumatov

Children play football.

A woman plays with her child in a street.
. Aksu, Kazakhstan. Reuters/Shamil Zhumatov

A woman plays with her child in a street.

Pensioner Konstantin Golubev, former welder at Aksu Ferroalloys Plant, looks out of his fishing tent on the banks of the Irtysh River.
. Aksu, Kazakhstan. Reuters/Shamil Zhumatov

Pensioner Konstantin Golubev, former welder at Aksu Ferroalloys Plant, looks out of his fishing tent on the banks of the Irtysh River.

Horses graze near Aksu Power Plant.
. Aksu, Kazakhstan. Reuters/Shamil Zhumatov

Horses graze near Aksu Power Plant.

The town also has a trade school so Aksu residents can get education and find work without ever leaving.

The only thing lacking is entertainment and those looking for night clubs or cinemas travel 50 km to regional centre

Pavlodar, Smotrich says. Others spend their free time fishing on the renovated embankment on the Irtysh river.

. Aksu, Kazakhstan. Reuters/Shamil Zhumatov
A man packs his fishing gear on frozen Irtysh River.

Unemployment in Aksu is just 1.2 percent, well below the 5.0 percent national average, and crime, locals say, is almost nonexistent.

. Aksu, Kazakhstan. Reuters/Shamil Zhumatov
Dana, 8, granddaughter of Petr Smotrich, draws in her grandfather's apartment.

Still, Smotrich says he is not sure whether his 8-year-old granddaughter will continue the metalworker dynasty.

"I did nudge my children (in that direction) but she will decide for herself," he said.

. Aksu, Kazakhstan. Reuters/Shamil Zhumatov
Cars drive on a road towards the Aksu Power Plant.