Kazakhstan Featurees - The Times Of Central Asia

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Podcast

Pannier and Hillard’s Spotlight on Central Asia: New Episode Coming Sunday

As Managing Editor of The Times of Central Asia, I’m delighted that, in partnership with the Oxus Society for Central Asian Affairs, we are the home of the Spotlight on Central Asia podcast. Chaired by seasoned broadcasters Bruce Pannier of RFE/RL’s long-running Majlis podcast and Michael Hillard of The Red Line, each fortnightly instalment will take you on a deep dive into the latest news, developments, security issues, and social trends across an increasingly pivotal region. This week, the team looks at the role of clusters in Uzbekistan's farming sector, which is key to understanding what Mirziyoyev's comments about farmers receiving some $1 billion in profits from this year's cotton harvest really means. Special guest: Umida Niyazova, the director and founder of the Uzbek Forum for Human Rights.

Energy Security

What Berlin Can Offer to Finance Kazakhstan’s Oil Routes

Kazakhstan has formally asked Russia to restore oil deliveries to Germany through the Druzhba pipeline after a six-month suspension. Russia suspended transit on May 1, citing unspecified technical constraints. Energy Minister Yerlan Akkenzhenov said on November 4 that he had delivered the request personally. President Kassym-Jomart Tokayev and Chancellor Friedrich Merz had discussed increasing Kazakhstan’s oil supplies to Germany at their September 29 meeting in Berlin. Merz described Kazakhstani crude as a means of diversifying supplies after Germany stopped buying Russian oil. On November 6, Kazakhstan’s Energy Ministry said no deliveries to Germany were planned via Druzhba for November or December, but resumption could be considered if the unspecified technical restrictions were resolved and transport conditions secured. Germany imported about 10.3 million metric tons of crude from Kazakhstan in 2025, according to UN Comtrade data. Kazakhstan’s Energy Ministry puts deliveries through Druzhba to the PCK refinery at Schwedt at 2.1 million tons that year. Druzhba therefore accounts for only part of Germany’s oil trade with Kazakhstan. Restoring Druzhba deliveries and developing additional routes would strengthen Kazakhstan’s access to European markets and give German buyers more options during disruptions. That shared interest gives Berlin a reason to consider helping finance the capacity needed to make this trade more reliable. Purchase Commitments and Transport Access In October 2025, KazMunayGas (KMG) extended its supply agreement with Rosneft Deutschland through the end of 2026. The contract provided for monthly deliveries from Karachaganak Petroleum Operating resources to rise from 100,000 to 130,000 tons; KMG also reported supplies from other fields. Russia’s Druzhba suspension followed in May 2026, despite that purchasing commitment. Any additional purchase commitments by German buyers would need corresponding arrangements for transit. Kazakhstani oil also travels across the Caspian Sea to Baku and onward through the Baku–Tbilisi–Ceyhan (BTC) pipeline. KMG’s annual report identifies work with Azerbaijan’s state oil company, SOCAR, to reduce tariffs, make charges transparent, and assess how Kazakhstani crude affects the Azeri Light blend. Renewed talks on higher volumes were reported in November. Negotiations over tariffs and crude quality would condition the delivered price of Kazakhstani oil for German buyers. Longer purchase agreements could support investment if producers undertake to supply the oil and if operators reserve the capacity to carry it. Lenders could assess whether the expected revenues would cover the facilities’ costs and how long repayment would take. Contracts would then have to establish who pays for unused capacity and bears losses from interrupted deliveries. The German government’s trusteeship over Rosneft Deutschland and RN Refining & Marketing, exercised through the Bundesnetzagentur, was extended indefinitely in February 2026. This gives Berlin a role on the purchasing side: it could encourage the companies to negotiate longer supply commitments with Kazakhstani producers. It could bring not only buyers and producers but also operators into these negotiations. At the receiving end, Germany has budgeted €400 million for 2025–2029 to improve the Rostock–Schwedt pipeline and the port of Rostock and make the adaptations needed to process non-Russian crudes from Kazakhstan and other suppliers. Nevertheless,...

CSTO

CSTO Without Armenia: What Keeps Yerevan From Leaving and What the Summit Means for Central Asia

Armenia has effectively stopped participating in the Collective Security Treaty Organization (CSTO) but has not formally withdrawn from the military alliance. At the November 11, 2026, summit in Moscow, Armenia lost its voting rights because of unpaid membership dues, while the CSTO's five other members — Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Belarus — agreed to develop collective aviation forces and mobile air defense units. Kazakh political analyst Maksim Kaznacheyev explained to The Times of Central Asia why Armenia's leadership is reluctant to sever ties with the CSTO and what the new military agreements could mean for Central Asian countries. Why Armenia Has Not Left the CSTO Yerevan froze its participation in the organization in February 2024, accusing its allies of failing to ensure Armenia's security during armed clashes with Azerbaijan. Armenia stopped paying membership dues and sending representatives to CSTO bodies. At the November 11 summit, CSTO members decided that Armenia would lose its voting rights and the ability to nominate candidates for senior positions because of unpaid contributions. CSTO Secretary-General Taalatbek Masadykov said, however, that the organization was not considering expelling Armenia. Kaznacheyev attributes Yerevan's reluctance to sever ties with the CSTO to Armenia's domestic political situation. "If Armenia leaves the CSTO or the EAEU, pro-Western actions could trigger an internal crisis and destabilize the country," Kaznacheyev said. He believes Prime Minister Nikol Pashinyan is seeking to avoid deepening divisions within Armenia as his government pursues closer ties with the European Union. Yerevan, however, has pursued different policies toward the two organizations. Armenia has suspended its participation in the CSTO but continues to operate within the Eurasian Economic Union (EAEU). On November 5, Pashinyan said the country was not preparing to leave the EAEU. The CSTO has experienced the departure of member states before. Uzbekistan signed the Collective Security Treaty in 1992, declined to renew it in 1999, rejoined the CSTO in 2006, and suspended its membership again in 2012. Kaznacheyev believes Armenia's situation is substantially different. "Uzbekistan's experience does not apply to Armenia because Uzbekistan had a unified political elite when it left the CSTO," Kaznacheyev said. He noted that Tashkent also had a bilateral security agreement with Russia, allowing it to maintain military cooperation outside the CSTO. For Kazakhstan, Armenia's dispute with the CSTO does not create an immediate security threat. Kaznacheyev said Astana's restrained position reflects its limited direct interests in Armenia and its growing transport links through Azerbaijan and Georgia toward Turkey. "That is why Kazakhstan maintains a restrained, neutral position," he said. What the New Air Defense Agreements Mean for Central Asia At the Moscow summit, CSTO members agreed to develop the organization's Collective Aviation Forces and approved plans for mobile air defense units to protect joint military formations. Plans call for incorporating combat aviation units alongside transport and special-purpose aircraft. Kaznacheyev believes the agreements could expand Russian military-technical assistance to Kazakhstan, Kyrgyzstan, and Tajikistan. He argues that Russia could help other CSTO members modernize their air forces and air defenses, particularly in Kyrgyzstan...

Coal Transit

Russian Rail Curbs Put Up to $470 Million in Kazakh Coal Exports at Risk

Transit shipments of Kazakh coal through Russia toward European markets fell by 97% in two months, from 1 million metric tons in August to 30,000 in October 2026, according to figures cited by economist Yernar Serik. Russian Railways approved no requests to ship Kazakh coal to Baltic ports for October or November, despite an agreement that gives qualifying shipments priority. Kazakh economist Yernar Serik estimates that up to 3.5 million metric tons of coal exports, worth $400 million to $470 million, could be at risk by year-end. The problems began in August, when shipments of Kazakh coal through Russia’s Black Sea port of Taman stopped. That left Baltic ports as the main maritime export route for Kazakh suppliers. Serik put September shipments at about 500,000 metric tons. The remaining October shipments went by rail toward Belarus and Poland, bypassing Russia’s Baltic ports. Priority Status That Failed to Secure Shipments In November 2025, Kazakhstan and Russia signed an intergovernmental agreement on rail transit and cargo handling for exports to third countries. Under Russia’s rules on access to railway infrastructure, freight volumes agreed under such treaties qualify for the fourth priority category, a relatively high ranking when the railway allocates capacity. On October 19, Kommersant reported that Russian Railways planned to cut October coal shipments to the Oktyabrskaya Railway in northwestern Russia by 80%. The newspaper obtained minutes of a Russian Transport Ministry meeting at which officials discussed the proposal. Its sources said suspending priority transit for Kazakh coal was also under discussion. Disruptions to shipping through Russia’s Black Sea ports during the war in Ukraine have led exporters to redirect freight to the Baltic, where the rail lines approaching the ports have struggled to absorb the extra traffic. Russian coal producers also face limits. The energy consultancy NEFT Research said the railway capped November coal shipments to Ust-Luga at 55% of the route’s capacity. Russia has announced no formal ban on Kazakh coal transit. Russian Railways has declined to comment on its plans for individual routes. How Much Could Exporters Lose? In 2025, Kazakhstan transported 11.7 million metric tons of coal through Russia to third countries, an increase of 27% from the previous year. The October 19 report put shipments in the first half of 2026 at 6.7 million metric tons, up 34% year over year. According to the pricing agency Argus Media, Kazakhstan shipped 4.7 million metric tons of coal through Ust-Luga and 2.6 million through Taman between January and July. Both ports handled shipments primarily for markets in Europe and Türkiye. Serik calculated the potential shortfall using August’s shipping volume as the monthly benchmark for the rest of the year. He assumed an export price of $115 to $135 per metric ton. The estimate represents the potential value of shipments that may not take place. The actual loss to producers depends in part on how much coal they can sell in other markets and what it costs to reroute it. "In effect, Russia is not directly banning Kazakh coal...

Cove Kaz

U.S. Financing Uncertainty Emerges for Kazakhstan Tungsten Project

Two U.S. government lenders are not currently pursuing up to $1.6 billion in financing for a major tungsten project in Kazakhstan, raising questions about construction funding for a venture intended to supply critical minerals to American industry and defense. The U.S. Export-Import Bank (EXIM) and U.S. International Development Finance Corporation (DFC) have no current plans to finance the project, according to a November 10 Reuters report. Developer Cove Kaz Capital Group maintains that work is proceeding on schedule and that it has not yet formally applied for construction financing. The proposed financing comprised up to $900 million from EXIM and $700 million from DFC. Both agencies issued preliminary letters of interest, but neither approved a loan. A DFC official told Reuters that the project had not advanced beyond the first stage of the agency’s four-stage review process. Reuters also reported that EXIM has no current plans to provide financing. The development creates uncertainty over a potential source of construction funding, although no previously approved loans have been withdrawn. Cove Says Development Remains on Schedule Cove has disputed suggestions that the lenders’ positions represent a definitive rejection of its financing plans. In a statement reported by Forbes Kazakhstan, the company said the project remains in the engineering and feasibility stage. Its definitive feasibility study is expected to be completed in 2027, after which it intends to seek construction financing. Cove said financing for its current development activities is secured and that it continues to consider commercial lenders, strategic investors, and potential customers as sources of capital. The company also maintained that its discussions with U.S. officials indicated continued support for the project. In its statement to Reuters, Cove said the project had received support under both the Biden and Trump administrations. Kazakhstan’s Position in Critical Minerals The project covers the Northern Katpar and Upper Kairakty tungsten deposits in Kazakhstan’s Karaganda Region. Cove Kaz acquired a 70% interest in Severniy Katpar LLP in April 2026, while Kazakhstan’s national mining company, Tau-Ken Samruk, retains 30%. The deposits represent a substantial undeveloped tungsten resource. Cove plans to develop mining operations and processing facilities producing ammonium paratungstate, an intermediate material used in manufacturing tungsten products. Tungsten is important to aerospace manufacturing, industrial machinery, and defense equipment. China dominates global production, making alternative supplies a priority for Washington. Kazakhstan is already a significant supplier of critical minerals to American industry. Kazakh-origin uranium accounted for 28% of deliveries to U.S. civilian nuclear power plant operators in 2025, according to the U.S. Energy Information Administration. Kazakhstan also supplies titanium to major aerospace manufacturers, including Boeing and Airbus, as highlighted by Kanat Sharlapayev, chairman of the presidium of Kazakhstan’s Atameken National Chamber of Entrepreneurs, at the B20 USA Summit in Washington on November 10. Financing and Political Implications Cove announced on November 2 that it had abandoned its planned merger with Skyline Builders and would instead pursue a direct U.S. stock-market listing during the first half of 2027. The company also announced a $32 million equity investment commitment from...

Corruption

Kazakhstan Detains Heads of Samruk-Kazyna and National Railways in Corruption Probe

Kazakhstan's National Security Committee (KNB) has confirmed the detention of the heads of the state-owned Samruk-Kazyna sovereign wealth fund and the national railway company Kazakhstan Temir Zholy (KTZ). Nurlan Zhakupov and Yelzhas Otynshiyev are suspected of involvement in a corruption-related offense. Both organizations play a central role in Kazakhstan's economy: the fund manages some of the country's largest state-owned assets, while KTZ operates its railway network, including freight transit between China and Europe. According to the KNB, which announced the detentions on November 12, the two executives were taken into custody the previous day during an operation conducted by the KNB's Anti-Corruption Service. Other individuals were also detained. The agency said investigative procedures were underway but declined to disclose details of the alleged offense, citing Article 201 of Kazakhstan's Criminal Procedure Code, which restricts the disclosure of information from pretrial investigations. The KNB said its anti-corruption efforts were continuing in accordance with President Kassym-Jomart Tokayev’s instructions and the government’s “Law and Order” principle. Nurlan Zhakupov had headed Samruk-Kazyna since April 2023. The sovereign wealth fund holds assets in the oil and gas, energy, transportation, and telecommunications sectors. Its portfolio includes the national oil and gas company KazMunayGas, uranium producer Kazatomprom, KTZ, and other major Kazakh enterprises. In March 2025, Zhakupov briefed President Kassym-Jomart Tokayev on the fund's investment portfolio, which comprised 130 projects worth more than $100 billion. Yelzhas Otynshiyev became head of KTZ on July 20, 2026. He previously held senior positions at Samruk-Kazyna, overseeing strategy and asset management. The fund is the railway company's sole shareholder. KTZ manages Kazakhstan's mainline railway network and is involved in developing the Trans-Caspian International Transport Route, commonly known as the Middle Corridor. The route connects China with European markets through Kazakhstan, the Caspian Sea, Azerbaijan, and Georgia, allowing freight to bypass Russia. The company is also preparing for an initial public offering (IPO), which would open it to private investors. Otynshiyev's detention coincided with the introduction of new Stadler passenger railcars into service. On November 11, the first train equipped with the new cars departed Astana for Almaty after repeated launch delays. The operator received the first 51 cars in December 2025, but technical issues, including concerns about the braking system, delayed their entry into service. According to KTZ, Stadler Kazakhstan will compensate the railway company for additional costs arising from the delay. The contract calls for the delivery of 557 railcars by 2030. The next service using the new cars is scheduled for November 13 on the Astana–Semey route. Kazakhstan's Prime Minister Olzhas Bektenov had previously criticized Samruk-Kazyna's management on November 4 for delays in implementing investment projects. However, the KNB has not suggested that either the investment-project delays or the Stadler contract is connected to the investigation. As of November 12, law enforcement authorities had not disclosed the specific nature of the alleged corruption offense or announced formal charges against Zhakupov and Otynshiyev. Their detention does not constitute a finding of guilt. The Times of Central Asia previously reported that,...