Kazakhstan is facing scrutiny as Turkish billionaire Robert Yüksel Yıldırım prepares to file for arbitration with the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) over the government’s controversial decision to transfer mining rights for two copper deposits to a newly established local company. Yıldırım’s Turkish-Dutch firm, CoreX Holding, invested approximately $200 million into the Koktaszhal and Kyzylshoky copper mines, only to find that after two years of waiting for government approval, the rights were handed to Altyndara Ltd., a company that had been registered just a week prior to the decision.
The situation has raised serious concerns about Kazakhstan’s commitment to foreign investment and its promise to move away from the cronyism that characterised the previous Nazarbayev administration. CoreX’s investment included covering operational costs, paying miners’ wages, and settling debts, all while awaiting the government’s approval for the acquisition of the mines. The abrupt decision to award the rights to Altyndara, which lacks a track record and visible funding, has been described as an expropriation by CoreX, prompting the company to seek legal recourse.
The backdrop to this dispute involves the Kazakh government’s efforts to attract foreign investment and modernise its mining sector. However, the actions taken by the Council for Attracting Investments, have raised questions about the integrity of the investment climate in Kazakhstan. The council’s decision to prioritise Altyndara’s application has been perceived as a move that undermines the interests of established investors like CoreX, who have already committed significant resources to the projects.
Altyndara’s director has connections to Kazakh oligarch Andrey Lavrentyev, further complicating the narrative of a fair investment process. The close ties between government officials and private interests have led to speculation about the motivations behind the decision to reallocate the mining rights. As the situation unfolds, CoreX is expected to leverage its past experiences in Kazakhstan, where Turkish investors have successfully challenged the government in international arbitration, to seek a resolution that protects its investments.
Kazakhstan’s reputation as a destination for foreign investment is at stake, particularly as it seeks to position itself as a reliable source of critical minerals in a global market increasingly focused on securing supply chains. The outcome of this arbitration could have significant implications for the country’s investment landscape and its ability to attract further foreign capital in the future.
