Kazakhstan’s mining sector is governed by a comprehensive legal framework that ensures state ownership of minerals while facilitating foreign investment. The Republic of Kazakhstan (ROK) retains ownership of subsoil resources, granting licenses for exploration and mining to legal entities. The Code on Subsoil Use 2017 (SSU Code) categorizes mineral resources into solid minerals, hydrocarbons, and uranium, with the Ministry of Industry and Infrastructural Development (MIID) overseeing solid minerals, while the Ministry of Energy (MOE) manages uranium and hydrocarbons due to their significance for energy security.
The SSU Code is modelled on Australian and Canadian practices and outlines various types of licenses for subsoil rights, including exclusive exploration and mining licenses. Foreign investors can hold mining rights without restrictions, provided they comply with the SSU Code. The licensing process has been digitized to prevent overlaps in mining licenses, and applications can be submitted online. Exploration licenses are essential for obtaining mining licenses, with holders having exclusive rights to apply for mining licenses within their exploration area.
Kazakhstan’s regulatory environment also includes provisions for environmental protection, requiring permits for activities with potential environmental impacts. The Environmental Code mandates environmental impact assessments (EIA) and public consultations before permits are granted. Furthermore, the ROK has pre-emptive rights over strategic subsoil plots, ensuring that the government retains control over critical resources.
Foreign lending is generally unrestricted, although lenders must navigate specific regulations related to subsoil rights. Tax legislation in Kazakhstan is subject to frequent changes, impacting corporate income tax, VAT, and other fees associated with mining operations. However, tax incentives may be available for investors engaging in significant development projects.
Overall, Kazakhstan’s mining sector offers a structured and transparent regulatory framework aimed at attracting foreign investment while safeguarding national interests and environmental standards.
