KAZAKHSTAN Law and Practice Contributed by: Timur Odilov, Mikhail Abdulov, Olzhas Abubakirov and Alnur Dauylbay, Haller Lomax LLP
5.3 International Treaties Related to Exploration and Mining
5.5 Role of Domestic and International Securities Markets in the Financing of Exploration, Development and Mining Securities Market Currently, there are two securities markets function - ing in Kazakhstan: the Kazakhstan Stock Exchange (KASE) and the Astana International Exchange (AIX). Despite their existence, both local and foreign com - panies usually raise funds on the global stage in Hong Kong, London, Toronto and Sydney financial centres. Kazakhstan issuers offering their securities (including derivatives) outside of Kazakhstan must offer not less than 20% of the total number of securities or deriva - tives offered abroad on KASE or AIX and notify the Agency of the RoK for Regulation and Development of Financial Market of the outcome of the placement of such securities or derivatives abroad. Notably, in 2025, the first successful dual-listing IPO took place on AIX and the Hong Kong Stock Exchange, when Jiaxin International Resources Investment Limit - ed, which operates exclusively at the Boguty tungsten mine in Kazakhstan, went public. Issuing Securities in Securities Markets The SSU Code provides for the definition of objects related to the subsoil use right (the “Objects”), encom - passing various forms of equity participation such as shares, participatory interests and securities verifying ownership rights or convertible into any type of equity participation in either a subsoil user or a legal entity or another organisation with the ability to directly and/ or indirectly influence decisions made by the subsoil user. The SSU Code requires obtaining prior approval of the MIC for an IPO or SPO of Objects on either domestic or international securities markets. 5.6 Security Over Mining Tenements and Related Assets Mineral rights (or a share in them) may be pledged under the conditions provided by the SSU Code or encumbered in other ways. However, a pledge of an exploration licence during the first year of the term of the licence is prohibited.
Kazakhstan is a party to actual BITs with approximate - ly 50 countries, establishing guarantees for the pro - tection of investment activities. Texts of these treaties can differ in terms of defining an investor, an object of investment, protected rights of an investor, and the procedure of investment protection. Nevertheless, all treaties stipulate the right of an investor to resolve an international investment arbitration, to protect their rights and investment. Additionally, Kazakhstan is a signatory to: • the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards; • the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States; • the Energy Charter Treaty; and • the Agreement on Promotion and Reciprocal Pro - tection of Investments in the Member States of the Eurasian Economic Community. 5.4 Sources of Finance for Exploration, Development and Mining In Kazakhstan, at the exploration stage, the main financial resources either come from the funds of subsoil users themselves using the capital contribu - tion or involve joint venture transactions. In the con - text of joint ventures, a smaller company, overseeing a set of exploration licences, provides an option for a senior company. This is done in exchange for the latter expending funds on exploration according to a mutually agreed schedule. Also, in practice, explora - tion financing is carried out through loans from third companies and banks, IPOs and private equity funds. As for the mining stage, loans from parent companies and investors, as well as banks and financial institu - tions, along with project financing and off-take agree - ments, are expected to become more accessible. Please refer to 5.5 Role of Domestic and Interna- tional Securities Markets in the Financing of Explo- ration, Development and Mining regarding financing from Securities Markets.
213 CHAMBERS.COM
Powered by FlippingBook