In October last year, former Vice Minister of Industry and Infrastructural Development Timur Toktabayev received 7 years in prison for the illegal transfer of a deposit with substantial reserves of nickel and cobalt to affiliated parties.
However, despite the high-profile court case, the influence of such schemes appears to continue to affect the industry, creating barriers for companies operating in the mining and mineral processing sector.
This is exactly the kind of case recently covered by the editorial team at Orda.kz.
In 2017, LLP «Solid Metals» purchased 420,000 tonnes of technogenic mineral formations (TMF) for the purpose of waste disposal and gold extraction.
The company also leased a 5-hectare plot from the Akimat of Sarkand District, Almaty Region, for 10 years to set up a base, equipment, special machinery, and a rotation camp with mobile communications.
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For reference: A technogenic mineral formation (TMF) site is an area where waste has accumulated after industrial activity, such as mining. This waste may contain valuable minerals or metals that can be extracted and processed into useful resources.
The project promised to be a success: the company invested around $5 million in modern equipment and innovative technologies, having previously obtained all necessary permits from the Ministry of Energy.
However, in July 2019, representatives of LLP «Aksenger LTD», who had obtained a licence from the Ministry of Industry and Infrastructural Development (MIID) to explore the deposit for a period of six years, arrived at the «Solid Metals» site.
It is noted that the boundaries of the plot allocated to «Aksenger LTD» for geological surveys partially overlapped with the TMF territory belonging to LLP «Solid Metals».
Soon after, «Aksenger LTD» appealed to the Department of Economic Investigations (DEI) and the Department of Ecology of the Almaty Region, accusing «Solid Metals» of illegal mining.
In connection with a criminal case launched in 2019 "on the fact of unauthorised use of subsoil", DEI officers arrived at the office of LLP «Solid Metals» in Almaty, sealed it, and seized documents confirming the purchase of the TMF and the lease of the plot.
The managers of «Solid Metals» were only able to recover the documents in June 2020, by which time the company had already lost several court cases initiated by the Department of Ecology, subsequently paying fines totalling around 1.4 billion tenge.
In December 2021, «Aksenger LTD» filed a lawsuit to declare «Solid Metals»' lease of the plot illegal. However, in March 2022, the court ruled in favour of LLP «Solid Metals», dismissing the opponent's claims.
In April 2023, «Solid Metals» appealed to the Anti-Corruption Service demanding a criminal case be opened against former Vice Minister of Industry Timur Toktabayev.
According to the company's representatives, he may have been involved in granting the licence to «Aksenger LTD».
However, the Anti-Corruption Service refused to initiate a case, citing an ongoing investigation already underway against the former Vice Minister.
In April 2024, after Mr Toktabayev's detention, the situation fundamentally changed: the court overturned the resolution of the Akimat of Sarkand District regarding the seizure of the land plot, returning 5 hectares of land, including the workshop, to «Solid Metals».
Yet the situation remains far from resolved.
According to data from the kompra.kz service, LLP «Solid Metals» is currently classified as inactive and is subject to a ban on registration actions, largely as a result of prolonged legal proceedings.
The company's tax debt amounts to around half a million tenge, and its debt under enforcement proceedings is approximately 1.4 billion tenge.
The equipment of «Solid Metals» remains looted, and the deposit is controlled by «Aksenger LTD».
As reported by Orda.kz, a representative of «Solid Metals», Assel Kirisheva, claims that the actions against the company are the result of collusion among representatives of several state bodies.
It is clear that today, despite active steps to improve the investment climate in Kazakhstan, the mining sector continues to face serious problems, which, it seems, makes the fate of any successful business in this field unpredictable.
Arguably, the situation with LLP «Solid Metals» is yet another reason to reflect on the legal protection of investors and the creation of more stable and transparent conditions for operating in the mining sector.