Kazakh Mining Companies Can Recalculate Purchases if Tenge Weakens

Kazakhstan will allow mining companies and their suppliers to adjust procurement prices when the tenge exchange rate changes, Orda.kz reports.

If the currency moves between the award of a tender and the signing of the contract, the price may be recalculated using the National Bank’s exchange rate on the signing date. Existing contracts may also be adjusted using the rate on the payment date.

The adjustment will not be automatic. Suppliers must provide a detailed cost breakdown and documents showing how the exchange-rate movement affected the price of the goods, work or services.

The mechanism works in both directions: prices may rise when the tenge weakens and fall when it strengthens.

The state will not cover the difference. Any adjustment will be settled between the mining company and its supplier.

The new rules take effect on September 6.

Original author: Alexander Zhdanov

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