REGULATORY LICENSING  ·  KAZAKHSTAN

Energy & Subsoil Use Licensing in Kazakhstan

Under the Code on Subsoil and Subsoil Use No. 125-VI of 27 December 2017, solid minerals are held under licences, while hydrocarbons and uranium are held under contracts with the State. Three different authorities grant these rights, and a transfer of a right or of a controlling stake usually needs a permit first.

The electricity sector is licensed far more narrowly. Only the transmission of electricity and its purchase for supply are licensed activities, so a generator does not hold an electricity licence. A new renewables project reaches the State's long-term purchase through an auction, not a fixed tariff.

Rights at a Glance

Legal Framework

• Subsoil: Code No. 125-VI, in force since 29 June 2018 and amended through 2026. Article 30 lists six licences: geological study, exploration of solid minerals, mining of solid minerals, mining of common minerals, subsoil space use, and artisanal mining. Article 35 reserves contracts for hydrocarbons and uranium. Solid minerals contracts from before the Code continue unless converted (Art. 278).
• Electricity: Law on Electric Power No. 588 of 9 July 2004, Art. 7-1.
• Renewables: Law on Supporting the Use of Renewable Energy Sources No. 165-IV of 4 July 2009.
• Licences generally: Law on Permits and Notifications No. 202-V of 16 May 2014, Annex 1; Tax Code No. 214-VIII of 18 July 2025, Art. 616 (fees).
• Authorities: the Regulations on the Ministry of Energy (Resolution No. 994 of 19 September 2014) and the Ministry of Industry and Construction (Resolution No. 864 of 4 October 2023), and Presidential Decrees No. 818 of 18 March 2025 and No. 861 of 28 April 2025 on the Agency for Atomic Energy.

Who May Hold Subsoil Rights

Foreign persons and foreign legal entities have the same rights and duties in subsoil relations as Kazakhstani ones, unless the Code, other laws or ratified treaties provide otherwise (Art. 2). Licence applications are filed in Kazakh and Russian, and a contract is concluded in Kazakh and Russian (Arts. 32, 36).

Two sectors have structural limits. On direct negotiation for a large hydrocarbon deposit, the national company must hold at least 50% as a subsoil user under the contract (Art. 103(5)). Uranium rights granted to the national uranium company by direct negotiation may pass only to an entity in which that company holds more than 75% for in-situ leaching deposits, or more than 50% for open-pit and underground deposits (Art. 160).

Solid Minerals: Licence Procedure

Exploration licence

1. File the application for specified blocks. Competing applications for the same block are taken in order of receipt, and a block that has become free again goes to auction to set the priority (Arts. 189, 189-1). Plots with prospects identified by state geological study, and areas of certain former contracts, are also granted by auction (Art. 221-1).
2. The Ministry reviews the application within ten working days. If there is no ground for refusal, it asks the applicant for security for liquidation obligations (Art. 188).
3. Provide the security within 40 working days of that notice.
4. The licence follows within five working days of proper security.

A licensee must meet annual minimum spending. In years one to three this is 1,200 MCI for a single block, 1,800 MCI for two to five blocks, 2,300 MCI for six to ten blocks, and 120 MCI for each further block (Art. 192). MCI is the monthly calculation index, KZT 4,325 for 2026. An extension request is filed during the sixth year (Art. 193(4)).

Mining licence

1. File the application with the report on resources and reserves (Arts. 204, 205).
2. The Ministry reviews it within ten working days, and the geological authority checks the boundaries of the plot.
3. The applicant receives a notice to obtain the environmental permit and the approvals and positive conclusions on the mining plan.
4. The licence follows within five working days of filing them.

The first compliant application receives the licence, and later applications for the same area are refused (Art. 206). Plots with reserves or resources on the state register that are free of subsoil operations are granted by auction instead, except common minerals and uranium (Art. 221-1); the auction territories are fixed in the state subsoil fund management programme (Arts. 70(3)(2), 221-1(2)). Two exceptions matter. On the recommendation of an advisory body under the Government, an auction territory may be transferred to the category reserved for the national solid minerals company on a priority basis (Art. 221-6(3)). And for five years from the rule's entry into force, a company implementing an industrial-innovation project worth more than 14,500,000 MCI that is on the single industrialisation map, and whose production is linked to subsoil use, may apply for an exploration or mining licence (other than for uranium or coal) over an auction territory at any time before the auction is announced, in which case no auction is held (Art. 278(7-2)). An extension request may be filed no earlier than four years before expiry, and the licence stays in force while it is reviewed (Art. 211).

Hydrocarbons and Uranium: Contract Route

An interested party applies to the Ministry of Energy to hold an auction, and the application is generally reviewed within 20 working days (Art. 94). The winner is the bidder offering the highest signature bonus (Art. 100). Within 20 working days of the published results the winner pays the bonus and returns the signed contract, and the Ministry signs within a further 20 working days. Failure passes the right to the next highest bidder.

The alternative is direct negotiation by the national company, which may name a strategic partner (Art. 103). Uranium goes to the national uranium company by direct negotiation (Art. 160), and the Agency for Atomic Energy now holds the functions the Ministry of Energy had for uranium. The Agency was created by Decree No. 818 as a body directly subordinate and accountable to the President.

Oilfield contractors have a separate regime. Works and services in the hydrocarbons sphere, such as drilling and seismic work, need a licence under Annex 1 of the Law on Permits. It is decided within 30 working days (Art. 30), and the fee is 100 MCI per sub-activity.

Transfers: Articles 43 and 44

A transfer of a subsoil right, or of an object linked to it such as shares in the holder or its parent, needs a permit from the competent authority (Art. 44(1)). The acquirer applies (Art. 45). There is no separate waiver of the State's priority right.

• Exemptions (Art. 44(2)) include intra-group transfers at the 99% level, and transfers after which the acquirer holds less than 25%.
• Timing: one month, or three months for large deposits and strategic plots (Art. 45(6)).
• State priority right (Art. 43) applies only to strategic plots: oil above 50 million tonnes, gas above 15 billion cubic metres, plots in the Kazakhstan sector of the Caspian Sea, and uranium deposits. It is decided with the permit, and while it is being considered the application cannot be withdrawn or changed for three months (Art. 46).
• Breach: a transfer without a permit may be declared invalid by a court on the competent authority's claim (Art. 44(4)).
• Change of control: a change in those who control the holder is notified within 30 calendar days (Art. 47).

A deal may also need merger clearance; see Competition Law and Merger Filings.

Ongoing Obligations for Subsoil Users

• Local content. In-country value in works and services must be at least 70% of those bought in a calendar year, under contracts and mining licences (Art. 28(2)). A hydrocarbons bidder that offered more is bound by its offer (Art. 100).
• Breach of a contract. The contract sets the penalty, and paying it does not discharge the obligation (Art. 133). Under a mining licence the penalty for a local content shortfall is 30% of the shortfall, and local content breach is not a ground for revocation under Art. 221(3).
• Liquidation security. Provide it by guarantee, deposit pledge or insurance in the cases the Code sets. A seller remains liable until the acquirer provides its own (Art. 55).
• Extensions. A uranium production extension is filed no later than six months before the period ends (Art. 173).

Electricity Licences

Article 7-1 of the Law on Electric Power licenses energy transmitting and energy supplying organisations. Annex 1 of the Law on Permits lists two licences in the electricity sector:

• Transmission of electricity (item 11-1). It is valid for three years and cannot be transferred. The Ministry of Energy, as the authorised body, issues, suspends and revokes it. A suspension may last up to six months, and on revocation the owner must transfer its networks within six months (Art. 7-1(3)).
• Purchase of electricity for supply (item 11). The applicant needs networks of at least four voltage classes directly connected to the national grid, and at least 30,000 directly connected consumers (Art. 7-1(2)). The fee is 10 MCI.

Generation is not on the list. A power plant still needs grid connection and the usual land, construction and environmental approvals. On the wholesale market, a wholly state-owned single buyer designated by the Ministry of Energy centrally buys and sells planned volumes (Arts. 1, 19-1).

Renewables: Auctions and Grid Access

A renewables generator may sell in one of two ways (Art. 9(1)):

• To the single buyer at the price set at an auction, or at a fixed tariff under a contract that already carries one.
• To consumers at agreed prices under bilateral contracts, or to supply organisations at capped tariffs.

Auctions select projects for new facilities. An organiser designated by the Ministry of Energy runs them electronically, and the Ministry approves the ceiling prices (Arts. 1, 6). After an auction, a generator on the Ministry's list signs a purchase contract with the single buyer, which buys for 20 years. The period runs from the start of comprehensive testing with delivery to the grid or from the contractual deadline for the acceptance act, whichever is earlier (Art. 7-1(4-2)). Prices are indexed each year (Art. 8-1(2)). Fixed tariffs apply only to contracts made before the auction provisions took effect, and for no more than 15 years from signing (Arts. 8-1(1), 11-1).

New facilities connect at the nearest point of the network of matching voltage (Art. 10(1)). Renewables have priority where capacity is limited (Art. 10(3)). Network companies must give free access, and a generator selling to the single buyer is exempt from transmission charges (Art. 9(7)). The owner pays for the line to the connection point (Art. 10(6)). Businesses notify the Ministry, the single buyer and the system operator of planned commissioning (Art. 9(4-3)).

Nuclear Activities

Siting, construction, operation and decommissioning of nuclear installations are licensed under Annex 1, item 17 of the Law on Permits, with a ten-year licence. The review period is 30 working days, with a longer period for some activities (Art. 30(4)). The fee is 100 MCI.

Common Mistakes by Foreign Investors

• Calling every right a licence. Hydrocarbons and uranium are contracts, and the authority, award route and term differ.
• Applying to the wrong body. Solid minerals, hydrocarbons and uranium have three different competent authorities.
• Assuming state pre-emption on every deal. The priority right covers strategic plots only. A gold or copper plot is outside it, but the Article 44 permit still applies.
• Closing before the permit. Indirect share deals can fall within Article 44. Build the permit into conditions precedent and allow for the three-month period where it applies.
• Budgeting for a generation licence. None exists, while connection and auction timing drive the schedule.
• Expecting a fixed tariff. New support runs through auctions.
• Overlooking uranium ownership limits. Article 160 restricts onward transfers of rights that came through the national company.

Frequently Asked Questions

Are mining rights in Kazakhstan licences or contracts?

New solid minerals rights are licences. Hydrocarbons and uranium are contracts. Solid minerals contracts signed before the Code continue unless converted.

Who grants subsoil rights?

The Ministry of Industry and Construction for solid minerals, the Ministry of Energy for hydrocarbons, and the Agency for Atomic Energy for uranium.

Does buying shares in a subsoil user need approval?

Usually yes, where the shares are objects linked to the right. Article 44 requires a permit unless an exemption applies, such as a holding of less than 25% after the transfer. A change of control must also be notified within 30 calendar days.

When does the State's priority right apply?

Only on strategic plots under Article 43. It is decided with the permit within three months, and there is no separate 30-day period.

Does a solar or wind plant need an electricity licence?

Generation is not a licensed activity under Annex 1 of the Law on Permits. The project needs an auction award to sell to the single buyer at an auction price, or a bilateral buyer, as well as grid connection and permits.

How long is a renewables purchase contract?

The single buyer purchases for 20 years under a contract concluded after an auction, with annual indexation.

Does the local content rule apply to mining licences?

Yes. The 70% rule for works and services applies to contracts and to solid minerals mining licences.

Experience

Related Pages

Subsoil Use Agreements →
Energy & Natural Resources →
Regulatory Licensing in Kazakhstan →
Mergers & Acquisitions →
Competition Law and Merger Filings →
Mining & Metals →

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Primary sources: zakon.uchet.kz — Code No. 125-VI Arts. 2, 28, 30, 32, 35, 36, 43–47, 55, 94, 100, 103, 133, 160, 172, 173, 188, 189, 189-1, 192, 193, 204–206, 211, 221, 221-1, 278; Law No. 588 Arts. 7-1, 19-1; Law No. 165-IV Arts. 1, 6, 7-1, 8-1, 9, 10, 11-1; Law No. 202-V Art. 30 and Annex 1; Tax Code No. 214-VIII Art. 616; Resolutions Nos. 994 and 864; Decrees Nos. 818 and 861.