MINEX Forum

Tag: Eurasian Resources Group

  • Kazakhstan Aluminium Producer Faces Billions in Tax Adjustments

    Kazakhstan Aluminium Producer Faces Billions in Tax Adjustments

    Kazakhstan’s leading aluminium producer, the Kazakhstan Electrolysis Plant (KEZ), part of the Eurasian Resources Group (ERG), has been hit with substantial tax adjustments amounting to billions of tenge. This follows a thematic inspection by the Kazakh tax authorities concerning transfer pricing practices for transactions conducted between 2018 and 2021. The tax authorities concluded their investigation in February 2024, resulting in a demand for additional tax payments totalling 2.448 billion tenge, excluding penalties and interest. The company has contested these findings through the judicial system, but initial court decisions did not favour KEZ.

    As of February 2026, KEZ paid the additional taxes, alongside penalties and fines totalling approximately 5.5 billion tenge, which included 2.4 billion tenge in additional taxes, 1.4 billion tenge in penalties, and 1.7 billion tenge in fines. Despite these payments, KEZ maintains that its transfer pricing policies comply with Kazakh legislation and OECD guidelines, prompting further appeals in higher courts. A subsequent ruling from the cassation court supported KEZ’s position, declaring the tax authority’s notification illegal and ordering the return of the paid amounts.

    Transfer pricing in Kazakhstan typically involves setting prices for goods and services in international transactions that differ from market rates, often leading to profit redistribution to more favourable tax jurisdictions. This practice poses significant risks, particularly in sectors like aluminium production, where costs can vary greatly due to transportation and additional expenses.

    The KEZ produces approximately 265,000 tonnes of primary aluminium annually, sourced from bauxite mined in Kazakhstan’s Kostanay region. In 2024, ERG exported 180,000 tonnes of aluminium to the European Union and Turkey. For the fiscal year 2025, KEZ reported revenues nearing 360 billion tenge, with a profit of 79.4 billion tenge.

    In June 2025, ERG announced plans to issue three-year securities from KEZ worth up to $100 million, backed by the Development Bank of Kazakhstan. The company has also engaged in significant lending activities, providing short-term loans totalling over $313,000 in 2025. Additionally, KEZ has been active in debt operations, securing various credit lines and refinancing existing debts, indicating a robust financial strategy amidst regulatory challenges.

    The financial report underscores KEZ’s commitment to maintaining liquidity and generating sufficient cash flow to support its operations and obligations, even as it navigates the complexities of tax compliance and international trade dynamics.

  • Kazakhstan’s Samruk-Kazyna Fund Acquires 40% Stake in Eurasian Resources Group

    Kazakhstan’s Samruk-Kazyna Fund Acquires 40% Stake in Eurasian Resources Group

    In a significant development for Kazakhstan’s mining sector, the National Wealth Fund ‘Samruk-Kazyna’ has acquired a controlling 40% stake in Eurasian Resources Group S.à r.l. (ERG), a major player in the mining industry. This transaction, which took effect on August 4, 2026, marks a strategic shift in the ownership structure of ERG, previously held by the State Property and Privatisation Committee of the Ministry of Finance of Kazakhstan.

    The acquisition was confirmed by ERG, which stated that the fund is now the sole owner of the 40% stake, while the heirs of Alidjan Ibragimov, one of the founding shareholders, hold 20.7%, and Shakhmurat Mutalip retains 39.3%. This change in shareholding is part of a broader strategy by the Kazakh government to manage state assets effectively through Samruk-Kazyna, which is tasked with ensuring the sustainable operation of businesses in the country.

    On the same day, Samruk-Kazyna released an official statement regarding the acquisition, highlighting its commitment to managing state assets in the interests of Kazakhstan. The fund’s involvement is expected to enhance the operational stability of ERG, which has assured stakeholders that its enterprises will continue to operate normally and adhere to its development strategy.

    The transaction follows earlier discussions regarding the potential restructuring of ERG, with reports suggesting negotiations between shareholders Mutalip and the Ibragimov heirs about possibly dividing the group into separate Kazakhstan and international entities. However, the Ministry of Finance has stated that it has not received any formal requests regarding such a division.

    Additionally, the acquisition comes amid ongoing negotiations between ERG and Portuguese company Mota-Engil concerning the sale of Bahia Mineração (BAMIN), which holds iron ore assets in Brazil. These talks have reportedly slowed due to the recent changes in ERG’s ownership structure, with a deal initially expected to be finalised by mid-2026 now facing delays.

    As the Ibragimov family ranks among Kazakhstan’s wealthiest, with a net worth of $1.677 billion as of May 2026, the implications of this ownership shift are significant for the future of ERG and its operations both domestically and internationally. The mining sector in Kazakhstan continues to evolve, with state involvement poised to play a crucial role in shaping its trajectory.

  • Eurasian Resources Group Commits $1 Billion to Kazakhstan’s Industrial Future

    Eurasian Resources Group Commits $1 Billion to Kazakhstan’s Industrial Future

    Eurasian Resources Group (ERG) has announced a significant investment of approximately $1 billion in Kazakhstan, aimed at bolstering the country’s industrial potential and long-term competitiveness. This investment strategy is rooted in the belief that the most impactful investments are those that continue to create value well beyond the initial capital commitment. ERG’s development program is designed not only to expand its business operations but also to enhance regional economies and contribute to the overall economic landscape of Kazakhstan.

    The investment initiative is set to modernise mining operations and production facilities, promote cleaner energy solutions, and accelerate the digital transformation within the industry. By the end of next year, ERG anticipates creating over 1,100 new jobs, while also contributing an estimated $1.3 billion annually to Kazakhstan’s GDP through direct production and associated economic activities. Key projects under this initiative include the Bolashak Mine, ERG Green, Spetskoks, and various renewable energy ventures, all of which reflect a commitment to industrial performance and environmental responsibility.

    Kudrat Shamiyev, CEO of ERG Kazakhstan, emphasised that effective leadership is about making decisions that will positively impact future opportunities, not just immediate financial results. He highlighted the extraordinary industrial potential of Kazakhstan and the necessity for strategic partnerships, continuous innovation, and responsible environmental practices to unlock this potential. The projects currently underway are viewed as foundational steps towards a more robust industrial future for Kazakhstan, reinforcing the notion that investment should focus on building a stronger future for the nation.

  • ERG Shareholders Consider Splitting Kazakhstan and International Mining Businesses

    ERG Shareholders Consider Splitting Kazakhstan and International Mining Businesses

    The owners of Eurasian Resources Group (ERG) are considering a major restructuring that would separate the company’s Kazakhstan operations from its international mining assets, according to people familiar with the discussions.

    The proposed split would divide the group between its two principal private shareholders, Shakhmurat Mutalip and Shukhrat Ibragimov. ERG currently generates most of its revenue from iron ore, ferrochrome and aluminium production in Kazakhstan, while also operating mining assets in the Democratic Republic of Congo and Brazil.

    Under the proposal, Shukhrat Ibragimov, ERG’s Chief Executive Officer and Chairman since 2024, would exchange his family’s 20% shareholding for ownership of the international business, which would be transferred into a newly created company. Shakhmurat Mutalip and the Government of Kazakhstan, which holds a 40% stake in ERG, would retain ownership of the group’s Kazakhstan mining and metallurgical operations.

    If completed, the restructuring would strengthen Mutalip’s influence over ERG’s domestic business, while allowing Ibragimov to focus on the company’s international portfolio, particularly its operations in the Democratic Republic of Congo. ERG owns several producing and development-stage assets in the country, including Metalkol, one of the world’s largest cobalt producers and a significant copper supplier.

    The discussions follow Mutalip’s acquisition of a 39.3% stake in ERG in May from the families of co-founders Patokh Chodiev and Alexander Mashkevich, reflecting a broader transition in Kazakhstan’s business landscape. Last month, the chairman of Mutalip’s construction company was appointed Chief Executive Officer of ERG’s Kazakhstan business.

    According to sources, approximately US$2 billion of ERG’s debt would be transferred to the new international company. The business would continue to face operational challenges in the Democratic Republic of Congo, including illegal mining activities affecting concessions operated by Metalkol and Boss Mining SAS.

    The potential restructuring comes amid growing international interest in critical mineral supply chains. The United States has increased its engagement in the Democratic Republic of Congo’s mining sector as part of efforts to diversify supplies of copper and cobalt away from China. In December, Washington signed a strategic partnership with the Congolese government aimed at supporting American investment in mining and infrastructure projects.

    Neither ERG nor representatives of the shareholders immediately commented on the reported plans.

  • Samruk-Kazyna Share Placement Worth $1.4 Billion Sparks Speculation Over Transfer of State’s 40% ERG Stake

    Samruk-Kazyna Share Placement Worth $1.4 Billion Sparks Speculation Over Transfer of State’s 40% ERG Stake

    Kazakhstan’s sovereign wealth fund Samruk-Kazyna has announced the placement of 31 of its own shares at 22.5 billion tenge each — a total of 697.7 billion tenge, equivalent to approximately $1.4 billion — in exchange for unspecified state property, sparking speculation that the transaction may involve the government’s 40% stake in Eurasian Resources Group currently held by the Ministry of Finance’s Committee on State Property and Privatisation.

    The fund’s sole shareholder, the Kazakhstani government, holds the pre-emptive right to purchase the shares. The announcement did not identify the state property being transferred, but the scale of the transaction — $1.4 billion — prompted financial analyst Arman Bataev of the Finmentor Telegram channel to suggest the asset in question is the government’s ERG stake, given that it is the most significant state-held mining asset at a comparable valuation.

    The timing adds to the intrigue. On 23 May, ERG announced a major ownership change: Nature Energy Solutions Ltd., owned by Kazakhstani businessman Shakhmurat Mutalip, acquired a combined 39.3% stake from Patokh Chodiev (18.6%) and the heirs of Alexander Machkevitch (20.7%). The Financial Times had previously reported that the transaction value was approximately $1.4 billion — precisely matching the sum now involved in the Samruk-Kazyna share placement.

    If the analysis is correct, the current ERG ownership structure would be: the Ministry of Finance holding 40%, the Ibragimov family 20.7%, and Nature Energy Solutions — Mutalip’s vehicle — 39.3%. A transfer of the Ministry of Finance’s 40% stake to Samruk-Kazyna would consolidate state control of ERG within the sovereign fund structure rather than the government’s direct balance sheet.

    ERG is one of Kazakhstan’s most strategically significant industrial conglomerates, producing ferroalloys, copper, cobalt, aluminium and gallium across operations in Kazakhstan, Africa and beyond.

  • Shakhmurat Mutalip Acquires 39.3% Stake in Eurasian Resources Group From Chodiev and Machkevitch Heirs

    Shakhmurat Mutalip Acquires 39.3% Stake in Eurasian Resources Group From Chodiev and Machkevitch Heirs

    Eurasian Resources Group has confirmed a significant change to its shareholder structure, with Nature Energy Solutions Ltd. — a company owned by Kazakhstani businessman Shakhmurat Mutalip — acquiring a combined 39.3% stake from two of the group’s founding shareholders.

    The acquisition comprises an 18.6% stake sold by Patokh Chodiev and a 20.7% stake sold by the heirs of the late Alexander Machkevitch. ERG said all of its enterprises continue to operate as usual and that the shareholding changes do not affect day-to-day operations, production programmes or the fulfilment of obligations to employees, partners and government authorities.

    The group said the restructuring is intended to strengthen business resilience, enhance corporate governance effectiveness and support the implementation of ERG’s long-term development strategy.

    The transaction marks a significant consolidation of Kazakhstani domestic ownership within ERG, one of the world’s largest diversified natural resources groups with major operations in copper, cobalt, aluminium, chrome and other commodities across Kazakhstan, Africa and beyond. Mutalip has been rapidly expanding his mining portfolio in recent months, having previously acquired gold producer Altynalmas and been linked to potential stakes in Kazzinc.

  • Kazakhstan’s Kazchrome Earns International Environmental Declaration for High-Carbon Ferrochrome Production

    Kazakhstan’s Kazchrome Earns International Environmental Declaration for High-Carbon Ferrochrome Production

    Kazchrome, the ferrochrome producer owned by Eurasian Resources Group, has obtained an international Environmental Product Declaration for its high-carbon ferrochrome, following an independent lifecycle assessment conducted by global inspection and certification firm SGS.

    The declaration confirms that Kazchrome’s ferrochrome meets rigorous international environmental standards across every stage of its production cycle, from raw material extraction through to end-of-life disposal. The assessment covered a comprehensive range of factors including mining, transportation and preparation of raw materials, water and energy consumption, and the ratio of primary to secondary inputs used in production.

    SGS’s ecology business manager for Kazakhstan and the Caspian subregion, IlyaKorlyakov, said the declaration goes beyond simply measuring a product’s environmental and carbon footprint — it signals a company’s commitment to continuous improvement in production processes in order to reduce its overall environmental burden. In an era of tightening carbon requirements and growing green economy pressures, he said, holding an EPD has become a meaningful competitive advantage in international markets.

    Kazchrome said its use of modern beneficiation, extraction and recycling technologies enables more efficient use of natural resources, reducing dependence on primary raw materials, cutting its carbon footprint and minimising the volume of waste sent to tailings dumps.

    The EPD positions Kazchrome to better meet the procurement and sustainability requirements of international buyers, particularly in Europe, where regulatory pressure on supply chain emissions is intensifying under frameworks such as the EU’s Carbon Border Adjustment Mechanism.

  • Proposed ERG Ownership Restructuring Raises Geopolitical and Sanctions Concerns

    Proposed ERG Ownership Restructuring Raises Geopolitical and Sanctions Concerns

    A reported restructuring of ownership at Eurasian Resources Group (ERG) is drawing attention from analysts and policymakers due to potential geopolitical implications involving sanctions enforcement, Russian financial influence and the control of critical mineral assets.

    ERG is one of the largest mining groups operating across Eurasia and Africa, with major copper and cobalt operations in the Democratic Republic of Congo. These minerals are essential for battery production, defence technologies and advanced manufacturing, placing the company within supply chains considered strategically important by Western governments.

    According to media reports and industry sources, Kazakh businessman Shakhmurat Mutalip is expected to acquire a significant stake in ERG in a transaction estimated at around $1.4 billion. The move has been interpreted by some observers as part of a broader effort by Kazakhstan’s leadership to reshape ownership structures among major domestic industrial assets.

    However, questions have emerged regarding the potential sources of financing and the broader network of business relationships connected to the proposed transaction. Some reports have suggested possible links between Mutalip and Russian banking institutions including VTB and Sberbank, both of which are subject to Western sanctions. If confirmed, such connections could raise concerns among regulators about exposure to secondary sanctions risks.

    Additional scrutiny has focused on ERG’s chief executive, Shukhrat Ibragimov. Ukrainian authorities have imposed a travel ban on Ibragimov on national security grounds, citing alleged concerns about possible involvement in facilitating sanctions circumvention by individuals connected to Russia. He has not been publicly included in Ukraine’s formal sanctions list.

    Observers have also highlighted business ties between Ibragimov and Kazakh investor Kenes Rakishev, a prominent figure in Kazakhstan’s financial sector. Rakishev is known for longstanding relationships within Kazakhstan’s political and business circles and has previously been associated with networks linked to Chechen leader Ramzan Kadyrov.

    Some reports have further drawn attention to allegations involving Kazakhstan Paramount Engineering, a defence manufacturing company reportedly linked to Rakishev through leaked communications referenced by the Kazakhstani Initiative on Asset Recovery. According to those claims, vehicles produced by the company were later observed in areas of Ukraine during the conflict. These allegations remain a subject of debate and scrutiny.

    The broader concern for policymakers lies in the strategic significance of ERG’s mineral assets. Copper and cobalt resources controlled by the group are central to global supply chains for energy transition technologies, defence systems and advanced industrial production.

    Analysts note that any ownership restructuring that increases exposure to sanctioned financial networks could potentially attract attention from regulators in the United States and the European Union. Western authorities have previously taken enforcement actions where indirect ownership structures were used to bypass sanctions.

    The situation also reflects wider dynamics within Kazakhstan’s political and economic landscape. In recent years, President Kassym-Jomart Tokayev has pursued efforts to reshape elite ownership structures that emerged during the Nazarbayev era. However, analysts note that shifts in corporate control do not necessarily eliminate the influence of longstanding financial and political networks operating across the region.

  • Unexpected bid intensifies battle for control of Eurasian Resources Group

    Unexpected bid intensifies battle for control of Eurasian Resources Group

    A new twist has emerged in Kazakhstan’s mining sector after businessman Shahmurat Mutalip put forward an offer to acquire a 40% stake in Eurasian Resources Group (ERG), entering a prolonged shareholder dispute and challenging the position of the company’s chief executive, Shukhrat Ibragimov. According to the Financial Times, Mutalip has reached a preliminary agreement with the families of ERG co-founders Patokh Shodiev and the late Alexander Mashkevich to purchase their combined holdings for $1.4 billion, subject to the Ibrahimov family waiving its right of first refusal.

    ERG was founded in the 1990s on the basis of former state-owned mining assets and later became one of the most prominent post-Soviet companies to list in London. Today, ownership is split between the three founding families, each holding about 20%, and the government of Kazakhstan, which controls the remaining 40%. The talks are taking place amid rising international competition for metals critical to clean energy, artificial intelligence and industrial infrastructure, increasing the strategic value of ERG’s assets.

    Mutalip’s move has surprised the market, given his limited background in mining and his career roots in construction. His recent interest in large-scale resource assets, including a reported bid for a controlling stake in Kazzinc, has raised questions about financing and long-term strategy. At the same time, ERG continues to face financial pressure due to its reliance on loans from Russian state banks under Western sanctions, adding further uncertainty to the outcome of the ownership battle.

  • SSGPO Secures $400 Million Syndicated Loan for Strategic Expansion

    SSGPO Secures $400 Million Syndicated Loan for Strategic Expansion

    Sokolovsko-Sarbayskoye Mining Production Association (SSGPO), part of the Eurasian Resources Group (ERG), has opened a new syndicated credit line worth up to $400 million with other firms under common control, according to its recently published financial report. The agreement was finalised in February 2025 and is set to run until 2029. The document states that the interest rate on the loans, denominated in US dollars and euros, will be a market rate.

    This latest move follows a similar arrangement made in 2024, when SSGPO signed a syndicated credit line agreement with affiliated companies for up to $300 million, with a repayment deadline of the end of 2028. Furthermore, SSGPO acts as a co-guarantor for ERG’s loans, alongside other subsidiaries within the group. As part of the new credit line, SSGPO provided a loan of $6 million to an unnamed company under common control in June 2025.

    SSGPO’s core business is the extraction and processing of iron ore. The company holds a number of iron ore mining contracts in the Kostanay region, which are due to expire in 2033, 2035, and 2040. In addition, SSGPO is currently constructing a hot-briquetted iron plant in Rudny, which is scheduled to commence operations in late 2027. The company’s financial performance for 2024 showed an increase in revenue to 424.1 billion tenge from 389.6 billion tenge in the previous year, although it recorded a loss of 69.3 billion tenge, a slight improvement on the 71.4 billion tenge loss in 2023. The sole owner of SSGPO is ERG Iron Ore Holding B.V., which is part of the broader ERG group. The Eurasian Resources Group itself is co-owned by the Ministry of Finance of the Republic of Kazakhstan, which holds a 40% stake, with the remaining shares divided between the heirs of Alexander Mashkevich and the Ibragimov family, each with 20.7%, and Patokh Shodiev, who holds 18.6%. The Ibragimov family is listed by Forbes as the seventh wealthiest in Kazakhstan, with a net worth of $2.06 billion.