Miner ERG weighs breakup to split assets between its owners

The owners of Eurasian Resources Group are considering splitting the mining group into two businesses, in an overhaul that would separate its Kazakh and international operations.

The sprawling group generates most of its revenue from producing iron ore, ferrochrome and aluminum in Kazakhstan, but also owns assets in Africa’s Copperbelt and Brazil. The potential breakup would divide ERG between the firm’s two main private shareholders, Shakhmurat Mutalip and Shukhrat Ibragimov, according to people familiar with the matter.

The possible breakup of ERG could end uncertainty over the miner’s future and open the door for both parts of the company to strike new deals with international partners, at a time when both Kazakhstan and the Democratic Republic of Congo are seeing intense interest from investors, trading houses and governments seeking to lock up supplies of metals.

If finalized, the spinoff would cement the influence of construction tycoon Mutalip over the operations in Kazakhstan. It would also allow Ibragimov, the firm’s current chief executive and chairman, to focus on the booming mining sector in Congo. ERG has a portfolio of producing and development-stage assets in the Central African nation including Metalkol, which is one of the world’s biggest sources of cobalt and a major supplier of copper.

A spokesperson for Mutalip didn’t immediately respond to a request for comment. A spokesperson for ERG was not immediately able to comment on the matter. 

Under the proposal being considered, Ibragimov – who’s led the company since 2024 – will exchange his family’s 20% stake in ERG for the international business, which will be moved under a new company, according to the people familiar, who asked not to be identified because the discussions are private. That would leave Mutalip and the Kazakh state as owners of the mines and plants in the Central Asian country, they said.

Mutalip, 35, acquired a 39.3% interest in ERG in May in a deal that underscores the wealth transition taking place in Kazakhstan, with a new elite rising since President Kassym-Jomart Tokayev consolidated power following 2022 riots that he called an attempted coup. The Kazakh government owns 40% of ERG.

Last month, the chairman of Mutalip’s construction company was appointed as chief executive of ERG’s Kazakhstan business.

Mutalip acquired his stake from the families of Patokh Chodiev and Alexander Mashkevich, who co-founded ERG’s predecessor company alongside Ibragimov’s father, Alijan Ibragimov. The group was formerly known as Eurasian Natural Resources Corp, and was once one of the biggest listed mining companies in London. 

It was de-listed by the founders in 2013 as the UK’s Serious Fraud Office investigated allegations of corruption at the company. The probe was eventually dropped in 2023.

Read more: Kazakh Tycoon Buys 39.3% Stake in ERG as He Builds Mining Empire

About $2 billion of ERG debt is expected to be transferred to the new firm that will be overseen by Ibragimov, the people said.

Ibragimov’s slimmed-down company would need to tackle the serious challenges that ERG has faced in Congo arising from illegal mining activities on the firm’s concessions, especially at Metalkol and another unit called Boss Mining SAS.

The potential spinoff also comes at a time when the US is deepening its involvement in Congo’s mining industry, aiming to reduce its dependence on Beijing for a range of mineral products. Chinese companies account for most of Congo’s copper and cobalt output.

The Trump administration signed a strategic partnership with the Congolese government in December which provides American investors with preferential access to some of the African nation’s mining and infrastructure projects.

(By William Clowes and Nariman Gizitdinov)