Reports of arrests of so-called illegal gold prospectors have become more frequent as gold prices hover near record highs. Despite legislative changes intended to legalize artisanal mining, many prospectors continue to operate outside the formal system. In an interview with inbusiness.kz, veteran geologist Bolat Kabaziev outlined why legalization has proven far more difficult in practice than on paper.
According to Kabaziev, the 2018 Subsoil Code was expected to unlock large-scale legal artisanal mining on designated plots approved by regional authorities and the Ministry of Industry. In reality, progress has been slow. He said artisanal gold mining remains constrained by environmental and water protection rules, as well as technical limits on production volumes, mining depth and allowable equipment.
While the law formally introduced artisanal mining licences, Kabaziev noted that bureaucracy remains a major barrier. Lengthy approvals at regional administrations have made the process complex and time-consuming. “On paper it was legalized, but in practice obtaining a licence has become difficult and slow,” he said.
Kabaziev also addressed the blurred line between informal prospectors and outright illegal miners. While some prospectors argue that subsoil resources belong to the people, he stressed that unauthorized mining is still a criminal offense under existing laws on subsoil use and precious metals. A deeper issue, he said, is the lack of clear oversight mechanisms once licences are issued. For example, the law caps artisanal gold production at 50 kg per year, but there is no effective system to monitor actual output or the movement of mined gold.
Additional obstacles include long approval timelines, multiple administrative clearances, technical constraints and, in some cases, resistance from local communities. Environmental and water permits are particularly hard to obtain, especially when gold-bearing placers are located in riverbeds, where approvals are often impossible.
Kabaziev cautioned that artisanal placer gold mining is also a high-risk business. Even on officially designated plots, prospectors must study historical geological data and consult experts before investing. “Statistics show that only a few actually earn money, but this is rarely discussed,” he said.
He also raised concerns about weak reporting requirements. Despite dozens of artisanal licences being issued in recent years, little gold is officially surrendered or recorded. Kabaziev believes most gold is sold through informal buyers, forming a shadow market, with uncertain downstream destinations. While estimates suggest illegal artisanal mining could amount to 10–15 tonnes of gold per year, he said much of this gold likely remains within Kazakhstan, entering jewellery production or, in some cases, refineries.
With gold prices recently exceeding $5,000 per ounce, Kabaziev acknowledged a renewed “gold rush” mentality. However, he said the phenomenon remains poorly studied. He argued that true legalization would require open dialogue between authorities, law enforcement, industry experts and the prospectors themselves to address regulatory gaps, environmental concerns and market transparency.
