Kazakhstan Business & Economy - The Times Of Central Asia

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Kazakhstan to Develop Rare Earth Metals Deposit in Karaganda Region

Kazakhstan’s national mining company, Tau-Ken Samruk, is preparing to develop the Kuirektykol rare earth metals deposit in the Karkaraly district of the Karaganda region, located in central Kazakhstan. Initial exploration of the Kuirektykol site began in 2022 and concluded in November 2024. Surveyors discovered commercially viable concentrations of rare earth elements, including cerium and lanthanides, across a 64.2 square kilometer area. Four promising zones were identified, with total resources estimated at 935,400 tons and confirmed reserves of 795,800 tons. Preliminary data suggests that reserves could potentially double with further exploration. On Monday, it was announced that Tau-Ken Samruk will lead the next phase of development, which includes pre-investment preparations such as additional geological studies, technology selection, and feasibility assessments. The company may proceed either independently or in partnership with private investors. “This approach has already been applied to pilot projects at the Karatas (copper), Zhosabai (gold), North Katpar, and Upper Kayrakty (tungsten) deposits,” the Cabinet of Ministers noted. “The Kuirektykol site, with its significant rare-earth reserves used in semiconductors and high-powered magnets, is the next in line for development”. Prime Minister Olzhas Bektenov highlighted the growth of private investment in the sector. Over the past six years, private capital in solid mineral exploration has tripled, reaching 100 billion tenge (approximately $198.6 million) in 2024. However, Bektenov also emphasized that state funding for geological exploration remains insufficient. In total, 38 promising areas with solid mineral deposits were identified across Kazakhstan in 2024. Earlier this year, Azat Peruashev, head of the Ak Zhol parliamentary faction, called on authorities to investigate subsoil users amid concerns over the alleged uncontrolled export of rare earth metals.

Singapore to Build Two Data Centers in Kazakhstan

Singaporean firm GK Hyperscale Ltd will participate in the construction of two major data processing centers (DPCs) in Kazakhstan's Akmola and Karaganda regions, according to Minister of Digital Development, Innovation and Aerospace Industry Zhaslan Madiev. Speaking at the AlmatyFair.ai exhibition, Madiev informed Kazakh President Kassym-Jomart Tokayev and his Uzbek counterpart Shavkat Mirziyoyev of Kazakhstan’s plans to expand the use of artificial intelligence (AI) across industrial and social sectors. He emphasized that large-scale AI deployment requires robust infrastructure, including high-capacity data centers. To this end, two centers with a combined capacity of 200 megawatts will be built with Singaporean investment. During the same event, an investment agreement was signed between the Kazakh government and GK Hyperscale Ltd. The deal will bring $1.5 billion in foreign direct investment to construct Tier 3-compliant data centers, an international standard defined by the Uptime Institute that ensures high reliability and availability. According to the ministry, these facilities will provide essential infrastructure for the growth of cloud computing, AI, and high-performance computing in Kazakhstan. “This project, in both scale and quality, will attract global technology giants such as Microsoft, Google, and Amazon, as well as companies specializing in big data and AI,” Madiev said. “It will bolster Kazakhstan’s position as a digital hub in Central Asia and drive the expansion of IT service exports.” An additional $1.2 billion will be invested in acquiring and upgrading a power plant to serve the new infrastructure. Funds will also support the construction of a wind farm and an energy storage system to ensure a stable power supply. Construction is scheduled to begin in the first quarter of 2026, with the first data center module expected to come online in 2027. As The Times of Central Asia previously reported, Kazakhstan is also developing legislation to regulate artificial intelligence, ensuring human oversight in its application.

Kazakh Lawmakers Propose Creation of National Cryptobank

Azat Peruashev, leader of the Ak Zhol political party's faction in the Mazhilis, the lower house of Kazakhstan’s parliament, has proposed the establishment of a national cryptobank. The initiative would involve the National Bank of Kazakhstan and second-tier commercial banks. In a formal inquiry addressed to Prime Minister Olzhas Bektenov, Peruashev highlighted the growing interest among Kazakhstanis in digital currencies, which are increasingly viewed as tools for investment, capital preservation, and peer-to-peer transactions. However, Kazakhstan currently lacks a legal framework for the use of digital assets, and the circulation of cryptocurrencies remains officially prohibited. Peruashev warned that this prohibition has driven the crypto market underground, with up to 90 percent of cryptocurrency transactions taking place outside the legal economy. "The ban has only fostered a shadow market, illegal exchanges, grey schemes, tax evasion, and the financing of illicit activities," he said. "Citizens are losing vast sums to scammers, pyramid schemes, and unregulated platforms. Billions in crypto assets are being transferred abroad without oversight, and the state is losing out on substantial tax revenues." Peruashev believes that establishing a cryptobank, a state-recognized institution for the regulation, exchange, and storage of digital assets, could serve as a vital tool for bringing the crypto sector into the legal domain. He proposed involving the National Bank and select commercial banks that already employ digital financial instruments. Such a system, he argued, would allow the state to reclaim control over the majority of crypto-assets circulating within the country and better protect users from fraud. The MP pointed to international precedents. In the United States, Anchorage Digital Bank, Kraken Bank, and Custodia Bank operate with federal oversight. Switzerland is home to SEBA Bank and Sygnum Bank both pioneers in integrating traditional finance with digital assets. “If something can’t be resisted, there’s only one solution, engage and lead. In this case, that means legalize and regulate,” Peruashev stated. As previously reported by The Times of Central Asia, Binance has officially launched operations in Uzbekistan, while Kyrgyzstan is considering legislation to establish licensed cryptobanks to manage digital assets within a regulated framework.

Kazakhstan Aims to Nearly Triple Investment in the Economy by 2029

Kazakhstan plans to significantly increase investment in its economy over the next five years, aiming to nearly triple current levels. However, officials from the Ministry of National Economy acknowledge that the primary challenge lies not in securing additional funds but in the shortage of high-quality investment projects. Shortage of Viable Projects At a recent meeting of the Expert Council under the Ministry of National Economy, Deputy Minister Arman Kasenov stated that the ratio of domestic investment to GDP currently stands at a modest 14-15%, a figure he described as objectively low. “To achieve higher rates of economic growth, investments need to increase 2.75 times, from $40 billion in 2024 to $103 billion by 2029,” Kasenov stated. To help reach this target, the government plans to allocate KZT 1 trillion (approximately $2 billion) through the state holding company Baiterek to stimulate business lending. This amount is expected to catalyze additional credit lines totaling KZT 8 trillion (around $15.9 billion). Still, Kasenov stressed that financing alone is not enough. “The real issue is the lack of quality projects,” Kasenov said. “This problem has been flagged by international development finance institutions. When we talk about increasing investment from $40 billion to $103 billion, it’s not just about capital, it's about where and how that capital is deployed.” Targeting High-Return Sectors To ensure impactful investment, the Kazakh government is prioritizing support for highly productive and export-oriented projects. These are concentrated in key sectors such as metallurgy, oil and gas, petrochemicals, and agriculture. Rustam Karagoyshin, the head of Baiterek Holding, outlined the financing model for investment projects, which consists of 60% market funding and 40% state-backed lending. In 2025, Baiterek plans to disburse a total of KZT 8 trillion in project financing, with KZT 3.75 trillion (around $7.4 billion) provided in the national currency. “Our main objective is to unify lending rates at 12.6% for end consumers. Standardizing rates will enable second-tier banks to participate across nearly all sectors where Baiterek operates today,” Karagoyshin said. Foreign Investment Outlook As The Times of Central Asia previously reported, Kazakhstan is looking to attract more foreign direct investment following a notable decline in 2023. Amid growing concerns about resource nationalism, the government is eager to position itself as a stable and attractive destination for international capital.

Central Asia’s Crypto Gamble: Growth Amid Uncertainty

Central Asian countries are approaching the cryptocurrency and crypto-mining industry at varying speeds. While some are just beginning to explore the sector, others have already taken significant, albeit sometimes contradictory, steps. Kazakhstan: From Mining Powerhouse to Regulatory Caution Kazakhstan once emerged as a global leader in bitcoin mining. Between mid-2021 and early 2022, the country ranked third in the world in terms of bitcoin mining capacity, accounting for 13.22% of global computing power, trailing only the United States and China. This boom was fueled by low electricity costs, favorable tax conditions, and an influx of miners fleeing stricter regulations in China. However, the rapid growth strained Kazakhstan’s energy infrastructure. The Ministry of Energy reported that while annual electricity consumption had previously grown by an average of 2%, in 2021 it surged by 6.1% and up to 12% in the densely populated southern energy zone. Digital mining was cited as the primary cause. By early 2025, Kazakhstan’s share of global mining capacity had dropped to just 1.4%, placing it outside the top five globally. Although around 60 companies are currently active in the sector, some operations have stalled. Tax legislation has tightened since 2022, with miners required to pay 1-2 tenge per kilowatt-hour depending on the energy source. Illegal mining and unlicensed exchanges remain a challenge; in 2024 alone, 12 criminal cases were launched against underground platforms. Despite these setbacks, experts see potential for a more sustainable and regulated industry. The Astana International Financial Center (AIFC) has become the hub for cryptocurrency operations. A 2023 law on digital assets and updated rules from the Astana Financial Services Authority (AFSA) in 2024 have laid a more comprehensive legal foundation, including provisions on cybersecurity and anti-money laundering. Over 10 licensed cryptocurrency exchanges now operate in Kazakhstan, including global names like Binance, Bybit, and Bitfinex Securities. New initiatives such as the digital tenge and the Cryptocard aim to further integrate blockchain into daily financial transactions. President Kassym-Jomart Tokayev reaffirmed the government's commitment to digital transformation in March 2025: “The development of the digital asset industry and blockchain technology plays a major role. Urgent measures must be taken to liberalize regulation, ensure the legal circulation of digital assets and crypto exchanges, and attract investment in digital mining,” he said. Uzbekistan: State-Supported Growth Uzbekistan has made blockchain and digital assets a policy priority. The National Agency for Perspective Projects (NAPP) is the main regulatory body. Between 2022 and 2024, the agency issued 14 licenses to cryptocurrency companies. The UzNEX exchange, an internationally licensed platform, has played a key role in developing the crypto market in both Uzbekistan and the wider region. Its services include crypto asset trading, staking, and NFT transactions. In 2024, it expanded its list of supported cryptocurrencies (including Toncoin) and plans to launch a digital art platform. Total trading volume exceeded $1 billion in 2024. Kyrgyzstan: Building a Legal Framework Since 2022, Kyrgyzstan has actively developed its regulatory environment for digital assets. The key legislation is the Law on Virtual Assets, which outlines...

Chinese Investor to Launch $400 Million Cotton Cluster in Southern Kazakhstan

Chinese company Xinjiang Lihua (Group) Co., Ltd. plans to invest nearly $400 million to establish a cotton-textile cluster in Kazakhstan’s Turkestan region. The announcement was made by Zhang Qihai, Chairman of the Board of Directors of Xinjiang Lihua, during a meeting with Kazakhstan’s Prime Minister Olzhas Bektenov. The large-scale investment project will be implemented within the TURAN Special Economic Zone, located in southern Kazakhstan. It envisions a vertically integrated cotton agro-industrial complex, from cultivation to the production of finished textile goods, including yarn, fabric, and clothing. More than 50,000 hectares of land have been allocated for cotton cultivation. The project also includes the construction of ten factories. Two of these will manufacture drip irrigation systems using modern water-saving technologies. Four others will handle the primary processing of cotton near the fields. The remaining four facilities, including garment, dyeing, and finishing factories, will produce the final textile products. The total investment exceeds 200 billion tenge (approximately $398 million), and the cluster is expected to create 3,000 permanent jobs in the region. To support the project’s needs, a plant for producing polyvinyl chloride (PVC) pipes has already been launched, and construction of the textile factories is underway. Xinjiang Lihua is also developing an irrigation system, including a canal network fed by a dedicated pumping station. Chairman Zhang Qihai praised Kazakhstan’s favorable investment climate and the region’s suitable agricultural conditions. He noted that the first finished products from the cluster are scheduled for release by October this year. “The creation of a cotton-textile cluster in Turkestan Region contributes to increasing the added value of domestic products, promoting agricultural development through processing, and enhancing the country’s export potential,” said Prime Minister Olzhas Bektenov. “The government will provide all necessary support for this initiative.” As previously reported by The Times of Central Asia, China also plans to support the establishment of a Scientific and Technical Innovation Center for Hydrogen Energy in Kazakhstan.