KAZAKHSTAN Trends and Developments Contributed by: Timur Odilov, Mikhail Abdulov, Olzhas Abubakirov and Alnur Dauylbay, Haller Lomax LLP
ing early signs of what may become a broader trend of attracting investment through exchange platforms. While many junior miners have traditionally raised capital in Canada or Australia, the AIFC is now taking active steps to facilitate exploration financing directly via the Astana International Exchange. A notable precedent is Jiaxin International Resources Investment Limited, which has demonstrated the fea - sibility of raising capital not only in China, but also in Kazakhstan. Nevertheless, the extended timelines required to reach an IPO continue to pose a chal - lenge, affecting the overall investment attractiveness of Kazakhstani platforms. In addition, consistent with the global rise of pri - vate equity, foreign private equity firms are showing increasing interest in financing exploration projects and entering the Kazakhstani market, and local private equity funds are likewise advancing through their early development stages. Environmental Considerations Environmental and land-use regulation is becoming increasingly stringent, particularly with respect to pro - tected areas and the permissibility of mining activi - ties within such zones. Previously, it was possible to reclassify land within specially protected natural areas into reserve land for mining purposes in some cases. However, recent legislative developments have sig - nificantly restricted this mechanism, and such reclas - sification is no longer permissible for most specially protected natural areas. These developments reflect a broader global trend of heightened scrutiny of environmental impacts and sustainability in resource extraction. Moreover, recent government policies increasingly prioritise the protec - tion and preservation of specially protected natural areas. Water reform Due to facing a significant water resource deficit, Kazakhstan adopted the new Water Code on 9 April 2025, developed by the Ministry of Water Resources and Irrigation of RoK (the “Ministry of Water”), which was established in 2023 in response to the country’s growing water scarcity.
The Water Code introduces the notion of “ecologi - cal flow” to prevent the depletion of water bodies and rules on the minimum permissible level of water needed to sustain river, lake and marine ecosystems. It also broadens public participation in water resource management decisions and strengthens environmen - tal protection requirements. The Water Code also tightens the regulatory frame - work for obtaining special water use permits, poten - tially affecting mining companies whose operations are located near water bodies or require significant water consumption for metallurgical processes, as it increases the administrative burden on such compa - nies. In addition, amendments to the SSU Code have trans - ferred the state geological survey functions related to groundwater from local executive authorities to the Ministry of Water. Tax Code Effective From 1 January 2026 Mineral Extraction Tax The current level of the Mineral Extraction Tax (MET) has become an increasing point of contention within the industry. A common view is that the existing tax burden renders many projects economically unvi - able. As a result, not all available resources are being brought into mining, leaving substantial reserves undeveloped in the subsoil – an outcome that contra - dicts the objective of achieving full resource recovery. At the same time, the Tax Code has not undergone significant changes with respect to MET. A notable amendment concerns gold and silver, for which a vari - able rate (range) has been introduced, linked to the mid-market price. Tax preferences for exploration companies It is notable that one of the key Tax Code amendments aimed at improving investment attractiveness for the mining industry is the introduction of a 100% capital expenditure deduction for exploration companies. MET for technogenic mineral formations To enhance the attractiveness of mineral processing, the Tax Code also introduced the possibility to apply a coefficient of 0.1 in some cases to the general MET
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