Kazakhstan Mining Giant ERG Could Be Split in Two — Bloomberg
Photo: ERG
The owners of Eurasian Resources Group (ERG) are considering splitting the company into two businesses — one comprising its Kazakhstan operations and the other its international assets, Orda.kz reports, citing Bloomberg.
If the deal goes through, ERG’s mines and plants in Kazakhstan would remain under the control of Shakhmurat Mutalip and the Kazakh state. Kazakhstan holds a 40% stake in the group, while 35-year-old Mutalip acquired a 39.3% stake in ERG in May from the families of Patokh Chodiev and Alexander Mashkevich.
Shukhrat Ibragimov, ERG’s current chairman, could take control of the company’s international operations. According to Bloomberg’s sources, his family would exchange its 20% stake in the group for foreign assets, which would be transferred to a new company. The new company would also assume approximately $2 billion in debt.
ERG generates most of its revenue in Kazakhstan from iron ore, ferrochrome and aluminium. However, the group also owns assets abroad, including in the African Copperbelt, Brazil and, most notably, the Democratic Republic of the Congo (DRC). In the DRC, ERG owns Metalkol, one of the world’s largest sources of cobalt and a major copper producer.
A split could remove uncertainty surrounding the group’s future and pave the way for both sides to pursue new deals with international partners. Investors, traders and governments are seeking to secure supplies of raw materials in advance,Bloomberg notes.
For Mutalip, such a split would consolidate his control over ERG’s Kazakhstan operations. Last month, the chairman of his construction company was appointed CEO of the group’s Kazakhstan division.
For Ibragimov, the deal would amount to a bet on the DRC. However, the assets would come with significant challenges. ERG has faced illegal mining on its concessions in the country, particularly at Metalkol and Boss Mining SAS.
The potential split of ERG comes amid growing US interest in the DRC’s mining sector. Washington is seeking to reduce its dependence on China for copper, cobalt and other critical minerals. Chinese companies currently control most of the country’s copper and cobalt production.
Original author: Ilya Astakhov
Read also:
Latest news
- Two Kazakhstan Refineries Report Separate Incidents in One Day
- Kazakhstan Announces Final Kurultai Election Results
- Minister Denies Kanye West Concert Setup Caused Almaty Blackout
- Camera Trap Captures Wolf Among Kulans in Kazakhstan
- State-Owned Power Plant Borrows to Repay Debt After Paying Executives 350 Million Tenge
- World’s Highest Skating Rink Cuts Parking Fees
- Kazakhstan to Use AI to Predict When Roads Need Repairs
- Kazakhstan Reappoints Heads of National Bank, KNB and Key Legal Institutions
- Kazakhstan’s Cashless Payments Top 500 Billion Tenge a Day
- Tourists Face Penalty for Painting Rock Near Lake Shalkar
- Pavlodar Refinery Delays Maintenance to Avoid Fuel Shortages
- Kazakhstan’s First Kurultai Election: What the Turnout and Exit Polls Show
- “Ask Me Next Year”: Tokayev Declines to Reveal Reelection Plans
- Tokayev Says Kazakhstan’s Vice President Will Be Named Within 10 Days
- Kazakh Uranium Giant Plans Major Sales to China and Russia
- Atyrau Oil Company Fined Nearly 1.5 Billion Tenge for Environmental Violations
- Kazakhstan’s Credit Rating Upgraded for First Time in a Decade
- While Thousands Lost Power, KEGOC Executives Received Nearly Half a Billion Tenge
- Changi Airport Group May Help Build Astana’s New Airport
- US Again Extends Deadline for Lukoil to Sell Its Assets in Kazakhstan
