KAZAKHSTAN Law and Practice Contributed by: Timur Odilov, Mikhail Abdulov, Olzhas Abubakirov and Dauren Sadykov, Haller Lomax LLP
Exploration, Development and Mining regard - ing financing from Securities Markets. 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 func - tioning in Kazakhstan: the Kazakhstan Stock Exchange (KASE) and the Astana International Exchange (AIX). Despite their existence, both local and foreign companies usually raise funds on the global stage in Hong Kong, London, Toronto and Sidney financial centres. Kazakhstan issuers offering their securities (including derivatives) outside of Kazakhstan must offer not less than 20% of the total num - ber of securities or derivatives offered abroad on KASE or AIX and notify the Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market on the out - come of the placement of such securities or derivatives abroad. In the State of the Nation Address in September 2023, President of Kazakhstan Kassym-Jomart Tokayev demanded the merger of KASE and AIX. However, the merger process between KASE and AIX was suspended due to the imposition of sanctions on one of KASE’s shareholders, Moscow Exchange. On 11 October 2024, the Moscow Exchange was withdrawn from the list of shareholders of KASE. Issuing Securities in Securities Markets The SSU Code provides for the definition of objects related to the subsoil use right (the “Objects”), encompassing various forms of equity participation such as shares, participa - tory interests, and securities verifying ownership rights or convertible into any type of equity par -
rights of an investor, and the procedure of invest - ment protection. Nevertheless, all treaties stipu - late the right of an investor to resolve an inter - national 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 Recipro - cal Protection 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 come from either the funds of subsoil users themselves using the capital con - tribution or involving joint venture transactions. In the context of joint ventures, a smaller com - pany, 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, exploration financ - ing is carried out through loans from both third companies and banks and IPOs. As for the mining stage, loans from parent com - panies, investors, as well as banks and financial institutions, along with project financing and off- take agreements are expected to become more accessible. Please refer to 5.5 Role of Domestic and Inter- national Securities Markets in the Financing of
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