KAZAKHSTAN Law and Practice Contributed by: Timur Odilov, Mikhail Abdulov, Olzhas Abubakirov and Alnur Dauylbay, Haller Lomax LLP
2.6 Community Development Agreement for Mining Projects The SSU Code imposes mandatory obligations for community development agreements in the case of territorial borders of settlements. The execution of an agreement on socio-economic development of the region is required if a requested area of exploration or underground mining wholly or partially belongs to the lands of townsites and adjacent territories within a distance of 1,000 metres. Also, the rental fees paid by a holder of exploration and mining licences are allocated directly to the local budget (city, village, etc) where the licence areas are located. Moreover, subsoil use contracts concluded before the enactment of the SSU Code usually include com - mitments for contributing to the socio-economic development of the region. These commitments are expressed as a percentage and usually amount to 1% of annual exploration or mining costs or a fixed cost agreed upon with the competent authority. 2.7 ESG Guidelines and Regulations ESG guidelines in Kazakhstan differ from their rep - resentation in other regions. Kazakhstan’s legislative framework addresses ESG requirements through separate channels for environmental aspects, social aspects and governmental aspects, thereby lacking a unified structure to consolidate them. Specifically, the Environmental Code and associated regulations set out requirements concerning environ - mental protection, including standards for emissions, waste management, water usage and biodiversity protection. Companies, especially those in sectors with significant environmental footprints, must comply with these regulations. Labour and employment laws in Kazakhstan address several social issues, such as workers’ rights, safety standards and non-discrimination. Additionally, there are laws and programmes aimed at promoting social welfare, health and community development. Governance in the ESG context typically refers to the system of rules, practices and processes by which
a company is directed and controlled. Kazakhstan’s corporate law outlines basic governance structures for businesses operating in the country. These include rules about shareholder meetings, board composi - tions, audit requirements and disclosure norms. 2.8 Illegal Mining Illegal mining is strictly prohibited in Kazakhstan, and the government takes measures to prevent and address such activities. While not a pervasive issue, the state remains vigilant, employing various strategies to combat illegal mining. Since 2021, illegal mineral operations are identified using remote sensing data. In 2025, the satellite monitoring enabled Kazakhstani authorities to detect 72 new cases of illegal mining. Engaging in illegal mining incurs severe penalties, including substantial fines and potential criminal lia - bility. As the price of gold has increased by more than 50% in recent years, this has driven a notable rise in illegal gold mining. For example, in East Kazakh - stan, illegal mining activities have caused damage to the state exceeding KZT400 million (approximately USD754,717). A criminal case has been initiated against the organisers, one of whom was a civil serv - ant. 2.9 Good and Bad Examples of Community Relations/Consultation Impacting Mining Projects Positive outcomes resulting from mining activities in local communities are often linked to the initiation of social initiatives by subsoil users in the cities and villages surrounding mining areas. These initiatives encompass the construction of essential infrastruc - tures, such as roads, parks and sports complexes, as well as providing financial and technical assistance to local businesses and entrepreneurs, thereby con - tributing to the well-being of local residents. Addi - tionally, comprehensive environmental management programmes are implemented, featuring reforesta - tion projects and measures to control pollution. For instance, Eurasian Resources Group, Kazzinc and other major mining companies have demonstrated their commitment by investing in the establishment
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