China’s Dalian Hesheng could see Kazakhstan’s investment in wheat and coal sectors
China’s diversified company Dalian Hesheng Holdings is considering a Kazakhstani partner for its project to build an industrial park for deep processing of up to 3 million tons of wheat in the Arshaly district of the Akmola region, according to the national company Kazakh Invest.
«The project will be financed primarily through the investors’ own capital, while the possibility of involving Kazakhstani partners for additional funding is also being explored,» Kazakh Invest said in response to Kursiv.media’s inquiry.
The project will be implemented in the Aqmola industrial zone, located in the Arshaly district of the Akmola region. The initial investment is expected to range from $500 million to $800 million, with an additional $1 billion planned for the second and third stages. Once operational, the industrial park is expected to contribute significantly to the regional economy, creating approximately 2,000 jobs.
At full capacity, the plant will initially process 1 million tons of wheat per year, eventually increasing to 3 million tons. While the exact timeline for reaching full capacity has not been specified, all wheat for processing will be sourced from Kazakhstan’s domestic market. The final products — including sodium glutamate, amino acids and environmentally friendly plastics — will be distributed both domestically and internationally. Key export markets are expected to include China, Southeast Asia, Europe and North America.
In addition to the wheat processing project, Dalian Hesheng Holdings plans to construct a coal-fired power plant (CFPP) and a coal chemical plant capable of producing 150,000 to 400,000 tons of liquid ammonia annually. The coal chemical plant will also manufacture a wide range of products, including food and feed additives, fertilizers and other fermentation-based goods.
The CFPP will serve as the primary energy source for the coal chemical plant, with all generated heat used to meet the facility’s energy demands. The power plant’s capacity has yet to be determined.
Kazakh Invest clarified that Dalian Hesheng Holdings will not receive a dedicated coal deposit in Kazakhstan. Instead, the company will purchase coal on the open market without acquiring subsoil use rights.
«All stages of the project will comply with strict environmental regulations to minimize environmental impact. The processed coal products will be used in the manufacturing of final goods,» Kazakh Invest stated.
The national company also confirmed that another Chinese company CHN Energy is planning to implement an investment project to build a $4 billion coal chemical plant in Kazakhstan. To this end, an agreement was signed by Kazakhstan’s Ministry of Industry and Construction, Kazakh Invest and CHN Energy in November 2024. Before this, CHN Energy representatives inspected three coal deposits in Kazakhstan to assess their potential.
Moreover, CHN Energy officials also expressed their willingness to consider new areas of cooperation, including the construction of renewable energy stations and gas chemical plants, once the coal chemical project reaches a more active phase.
According to Kazakh Invest, given Kazakhstan’s substantial coal reserves and the country’s gradual shift away from coal-based power generation, the industry requires a new development strategy. A key element of this transition will be coal chemistry, which presents new opportunities for industry growth and transformation. Currently, the share of coal-derived products in Kazakhstan is only 3%, but estimates suggest the untapped potential of the sector is worth $25 billion, highlighting significant opportunities for investment and collaboration.
During the cabinet’s extended meeting on. Jan. 28, Prime Minister Olzhas Bektenov stated that China Energy, the world’s largest energy company specializing in coal mining and processing, is currently selecting a suitable deposit in Kazakhstan for coal chemistry development.
In 2023, coal production in Kazakhstan decreased by 1.1%, totaling 112.7 million tons. Traditionally, most of the coal mined in the country was used for electricity generation (65.9 million tons), while 31.9 million tons were exported. Additionally, 9 million tons were supplied for municipal and domestic needs and 5.9 million tons were provided to industrial enterprises.
Kazakhstan ranks among the top ten countries in terms of coal reserves, estimated at 33.6 billion tons. At the current rate of consumption, these reserves are expected to last for 300 years. Coal generates about 70% of Kazakhstan’s electricity.
In June 2024, Turar Zholmagambetov, deputy chairman of the Industry Committee at the Ministry of Industry and Construction, told Kursiv.media that coal consumption in Kazakhstan could increase by 2035 following the launch of coal-fired combined heat and power plants (CHP) in Ust-Kamenogorsk, Semey and Kokshetau, the expansion of several power units in Ekibastuz and the development of coal chemistry capacity by 25 million tons.
