Kazakh State Tightens Grip Over Critical Minerals Miner ERG

On August 23, Kazakhstan will hold elections to its newly established unicameral parliament, the Kurultai, marking the latest phase of the political elite’s consolidation under President Kassym-Jomart Tokayev. Last month, the Constitutional Court determined that Tokayev can legally stand for the presidency again under the new basic law that entered force on July 1, leaving his earlier pledge not to seek office again – his current term ends in 2029 – firmly in the balance. Whether Tokayev decides to exercise that privilege or not, Kazakhstan’s business elite is being recast in his image, right in time for a new electoral cycle. Despite his criticisms of the “oligopolies” formed under predecessor Nursultan Nazarbayev, some of the country’s most powerful companies outside of the oil sector are now concentrated in even fewer hands, thanks to a series of megadeals first reported in the second half of last year. At the same time there has been a subtle shift, with the new captains of industry visibly more tethered to officialdom writ large than the Nazarbayev-loyal oligarchs who preceded them. One of the clearest examples of this trend is Luxembourg-domiciled Eurasian Resources Group (ERG), a mining group whose critical minerals output is globally significant, and whose contribution to the Kazakh economy is estimated between 2 and 4 percent of GDP. Integra, ERG, and Business ‘China-style’ In a series of clips posted to his official Instagram, Kudrat Shamiyev discusses Integra Construction KZ, “the biggest construction company in Kazakhstan,” with another delegate at an international Taekwondo event. “We do exchange… I own mining company. So, we take resources, we give enough,” begins Integra’s 36-year-old chairman, who is also Kazakhstan’s Taekwondo federation chief, speaking in English. The clip is backed by Drake’s 2023 track, featuring J. Cole, “First Person Shooter. “Similar to China-style?” interjects the man seen in the clip. “It’s a good idea.” “Yes,” replies Shamiyev. “It is easier for us, easier for now.” The full context of the pair’s exchange is unclear, as is the delegate’s identity and the identity of the mining company that Shamiyev is referring to. The clips are spliced with footage of Integra projects. At one point the delegate offers to introduce Shamiyev to his government to discuss a proposal to build a railway, Integra’s stock and trade. But the “similar to China-style” remark is on the nose. With its large, integrated business groups in strategic industries subject to strong political oversight, Kazakhstan’s giant next-door neighbor rewrote the book on state capitalism. And for all Tokayev’s lip-service to liberalization and privatization, Astana is embracing the state capitalism model wholeheartedly, especially in the mining sector. By the time the third of three clips was posted in June, Shamiyev had added another title to his list: CEO of Eurasian Group LLP, the Kazakh division of Eurasian Resources Group (ERG). Entities that the 36-year-old now oversees as part of that role produce giant quantities of iron ore, bauxite, alumina, and ferrochrome, the kind of industrial inputs at the heart of geostrategic competition between Beijing and the West. ERG is additionally a major producer of cobalt – vital for battery production – although these assets are based in the Democratic Republic of Congo. Shamiyev’s appointment at ERG came after Integra’s owner, Shakhmurat Mutalip, dubbed Kazakhstan’s “youngest oligarch,” secured 39.3 percent of the group in May. As The Diplomat reported in an investigation in April, Shamiyev is not just an employee of Mutalip’s, but his childhood friend, having attended the same school in a village outside Almaty. Questions around the financing for Mutalip’s buy-in, its implications for ERG’s large outstanding loans to Russian banks sanctioned by Western governments, and the potential impact on supply chains have combined to see the company formerly known as Eurasian Natural Resources Corporation (ENRC) reignite Western press interest. But it is also striking how a company once inextricably associated with its three founding members — post-Soviet oligarchs Aleksander Machkevitch, Alijan Ibragimov and Patokh Chodiev – appears to be edging further and further toward government control. The Diplomat contacted Kudrat Shamiyev, Nature energy solutions Ltd., ERG and the Kazakh presidential administration prior to the publication of this article. They declined to comment. “Semi-nationalization”? The Kazakh state’s stake in ERG grew from less than 12 percent to 40 percent after the company delisted from the London Stock Exchange in 2013, where it was being pursued by the UK’s Serious Fraud Office (SFO) at the dawn of an investigation that would last a decade and end with the expensive case being dropped with no charges brought. That increased heft gave Astana the right to send two representatives to the group’s five-member board. According to financial analysts, the government had often used ERG as a “wallet” in the past, asking it to sponsor infrastructure projects not covered by the state budget. The company moreover had to adjust on the hoof to Nazarbayev striking business deals during his trips abroad, sources familiar with the company told The Diplomat. But a privileged relationship with Nazarbayev – Machkevitch was reportedly particularly close to the former president – allowed boardroom strategy to remain largely within the orbit of the group known as the “Troika,” or Trio, and their relatives For many critics, they became the ultimate symbol of a footloose, yacht-owning elite that raked in profits from Kazakhstan’s natural resources without paying too much for the privilege. Of the three, only Chodiev, an Uzbekistan-born Belgian citizen, is now alive. He and the heirs of Machkevitch, a Kyrgyzstan-born Israeli national who died last year, sold their shares of 18.6 percent and 20.7 percent respectively to Mutalip’s Nature energy solutions Ltd. for undisclosed sums. The Ibragimov family has not sold its shares. Alijan Ibragimov’s son Shukhrat, a Kazakh citizen, became the group’s chairman in 2024, fulfilling an ambition that first stirred during a childhood spent partly in the company’s offices with his father. Last year, Ibragimov saw his own bid to secure a majority stake in the company “gatecrashed” by Mutalip, as per the Financial Times. Now the board is a four-person affair, with Ibragimov the last remaining member boasting any blood ties to the founding Trio. In March, Roman Sklyar, Kazakhstan’s then famously hands-on first deputy prime minister, replaced Serik Zhumangarin, a lower-ranking deputy prime minister, as one of the government’s representatives to ERG. In May, Sklyar became Tokayev’s chief of staff. That role in charge of the presidential administration is arguably the most powerful in Kazakh politics besides the presidency, and one typically not combined with boardroom positions. Just days after his promotion, the FT reported that ERG faced “semi-nationalization,” with Sklyar poised to replace Ibragimov as CEO in a “boardroom showdown.” Loyalty and Leverage That has not yet come to pass, with ERG stating at the time that it would not comment on rumors. But the addition to ERG’s board of Nurlan Zhakupov, CEO of Kazakhstan’s sovereign wealth fund, Samruk-Kazyna, reported by Kazakh media in June, has only reinforced the impression that the state is going to make use of its status as the largest shareholder. Zhakupov’s day-to-day responsibilities include overseeing Samruk-Kazyna’s portfolio of state-owned companies, including the national rail operator, Kazakhstan Temir Zholy (KTZ) — Mutalip and Shamiyev’s most important client at Integra Construction. On August 6, Samruk-Kazyna confirmed that it had taken over the government’s stake in ERG, previously held by the Ministry of Finance. The relationship between Samruk and Integra is just one of several indicators that the fourth member of the board – Mutalip himself – is likely to be a highly cooperative figure for the government. The company through which Mutalip acquired his stake in ERG, Nature energy solutions Ltd, includes among its directors a man named Bauyrzhan Bishenov. This appears to be the same Bishenov, who at least as recently as April 2025 was serving as an official in Tokayev’s administration, now overseen by Sklyar. While it is unclear if Bishenov has any specific role at ERG, he was in 2024 referenced in Integra’s social media posts as a member of that company’s supervisory board. His previous management positions included a stint as deputy chairman of the national highway operator KazAvtoZhol (2017-18), and before that as managing director of KazAgroFinance, another state company that provides finance to farmers, where he overlapped with Tokayev’s nephew, Kanysh Izbastin (board chairman from 2015 to 2021). Mutalip and Shamiyev, for their part, are both members of Kazakhstan’s new super-party, Adilet, which seems likely to sweep elections to the Kurultai later this week. Adilet is headed up by Sklyar’s predecessor as chief of staff, Aibek Dadebay. Shamiyev’s LinkedIn profile moreover reveals that he is the recipient of a medal for “contribution to national security,” awarded to him by the Committee for National Security, Kazakhstan’s independence-era successor to the Soviet KGB. In July, Bloomberg reported on private discussions over a plan to split up ERG’s domestically-based and international businesses, while dividing the company’s multi-billion dollar debt pile across the shareholders. The plan would leave all Kazakh operations under the exclusive ownership of Mutalip and the government and “allow Ibragimov…to focus on the booming mining sector in Congo,” the business wire suggested. Kazakhstan’s government stated that it had not been informed of any proposals as of July 20.