KAZAKHSTAN Trends and Developments Contributed by: Timur Odilov, Mikhail Abdulov, Olzhas Abubakirov and Dauren Sadykov, Haller Lomax LLP
come, first-served mechanism and functions of the NGS were rejected by the working group. The same working group of the Parliament, within two weeks, voted on amendments rein- troducing the government’s authority to review compliance with principles of rational and com - plex subsoil use. In practice, this means approv - ing mechanisms of annual production volume, methods used and other performance param - eters of mining operations. Additionally, the government has declared its intent to require mining companies to procure more local goods, works and services, with the threat of substantial fines for non-compliance. It has also proposed restoring the previously abol - ished priority right of the state-owned National Mining Company Tau-Ken-Samruk JSC to gain exploration and mining licences by bypassing competition mechanisms such as first-come, first-served principles or auctions. These measures, if adopted by Parliament, could undermine progress achieved under the SSU Code and may deter international invest - ment by increasing bureaucratic oversight and legal risks. In addition, legislative changes are often adopt - ed without extensive discussions and analyses, potentially affecting inclusivity. This is particu - larly relevant to restrictive or limiting regula - tions, which are frequently implemented on an expedited basis. Such practices may result in a regulatory environment characterised by unpre - dictability. Resource Classification Standards Discussions at the Parliament about repeal - ing CRIRSCO resource and reserves reporting standards in favour of Soviet-era reserves clas -
sification systems could undermine the govern - ment’s and the President’s policy of attracting more investments to the mining sector after the significant progress made since the 2018 reforms. The adoption of CRIRSCO standards was a pivotal step in aligning Kazakhstan with international best practices, and reversing this could create uncertainty for investors accus - tomed to globally recognised frameworks. Fiscal and Local Content Challenges Increased subsoil use tax rates and stricter local content requirements further add complexity for operators and investors. While these measures aim to boost domestic manufacturing and devel - opment of the local business community, they could elevate costs and reduce the competitive - ness of Kazakhstan’s mining sector on the global stage. Striking a balance between robust over - sight and market-driven principles will be critical for sustaining the sector’s growth and appeal. Also, Kazakhstan plans to introduce a new Tax Code to be in force from 1 January 2026. Environmental Considerations and the Water Code Water scarcity and mining operations The proposed Water Code reflects growing concerns about water scarcity in Central Asia. Restrictive measures on mining activities near water bodies could increase operational costs and complicate project implementation. As mining is a water-intensive industry, balancing operational needs with environmental sustain - ability will be crucial. Companies may need to adopt innovative water management solutions, such as recycling technologies, to mitigate the impact of these restrictions. Stricter environmental policies Environmental policies are becoming more strin - gent, with a focus on reducing the ecological
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