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Kazakh businessman Shakhmarat Mukalip, owner of the Integra Construction KZ group, has reportedly received support from Swiss company Glencore for his bid to acquire a 40% stake in Eurasian Resources Group (ERG). The proposed deal is valued at approximately $1.4 billion.

Glencore is prepared to provide an advance of $800 million, to be repaid through future ferrochrome deliveries, to finance the acquisition. Ferrochrome is a key component primarily used in the production of stainless steel.

Competition for ERG Stake

Mukalip's offer is considered to have an advantage over another proposal for the ERG stake from Shukhrat Ibrayimov, son of the late co-founder of ERG, Alijan Ibragimov, and CEO of Eurasian Resources. This indicates a competitive landscape for control of the significant mining and metals group.

Potential Deal for KazZinc

In addition to the ERG stake, Mukalip and Glencore are reportedly discussing another potential transaction. This involves the possible acquisition of Glencore's 70.2% stake in the KazZinc company by the Kazakh entrepreneur. This deal is preliminarily valued at around $3.5 billion.

Collectively, the deals under discussion could amount to approximately $5 billion. Through these transactions, Glencore aims to maintain its access to raw materials via metal supply agreements.

ERG's Financial Performance

ERG's primary Kazakh assets reported a loss of 23 billion tenge for the full year 2024. This marks a significant downturn compared to the net profit of 135 billion tenge recorded in 2023, according to economist Arman Batayev, author of the Finmentor Telegram channel.

The ownership structure of ERG includes the Ministry of Finance of the Republic of Kazakhstan holding 40%, while the heirs of Alexander Mashkevich and the Ibrayimov family each hold 20.7%. Patokh Chodiev holds the remaining 18.6%.

The founding members of Eurasian Resources Group – Alexander Mashkevich (deceased, assets passed to heirs), Patokh Chodiev, and Alijan Ibragimov (deceased, succeeded by his wife Mukadaskhan Ibrayimova and their four sons) – were among the first dollar billionaires in Kazakhstan in 2005, each with a capital of $1 billion, according to Forbes.

This information was reported by the Infohub.kz news agency.