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The son of one of the Kazakh oligarchs who founded what is now Eurasian Resources Group is seeking to buy out his late father’s partners in a deal that would give Shukhrat Ibragimov a majority stake in the international mining house.
The tussle for control is the latest twist in the history of the former FTSE 100 company, then known as ENRC, which once had a market valuation of £13bn.
The sprawling Kazakh conglomerate became a symbol of the flow of Soviet money into London in the 2000s when it first floated its shares and gained further notoriety when it delisted six years later amid a corruption probe by the UK Serious Fraud Office.
Ibragimov, 39, who has served as ERG chief executive since October, has proposed to acquire 40 per cent of the company currently held by Patokh Chodiev and the heirs of the recently deceased Alexander Machkevitch, according to five people familiar with the talks.
Chodiev, Machkevitch and Ibragimov’s father Alijan Ibragimov — known in the industry as “the Trio” — founded the business in the 1990s with formerly state-owned mining assets that were privatised by the Kazakh government following the collapse of the Soviet Union.
The three men, once described by one of their non-executive directors as “more Soviet than City”, listed the company in London in 2007 and expanded operations to include projects in Zambia and the Democratic Republic of Congo.
The subsequent SFO investigation centred on the suspected payment of bribes in DR Congo but was eventually dropped in 2023 after a bungled 10-year probe, during which ENRC sued the SFO over alleged misconduct.
Ibragimov has worked for ERG since 2015 and served on the board since 2021, following his father’s death. The transition to the next generation continued last year, when Chodiev passed his board seat to his son Sabir Chodiev and Machkevitch was replaced by his nephew Eduard Surlevich.
The talks to enable Ibragimov to acquire the other families’ stakes also began last year but have gathered pace since the death in March of 71-year-old Machkevitch after a long illness, two of the people said.
Each of the three families owns about 20 per cent of Luxembourg-registered ERG, with the remaining 40 per cent held by the Kazakh government.
Chodiev and the heirs of Machevitch are thought to be open to selling but valuing the company has proven challenging and talks have periodically become hostile, the two people said.
While the Chodiev and Machkevitch families have sought as much as $1.8bn for their combined 40 per cent stake, Ibragimov has argued for a lower valuation, they added.
The three families also share ownership of a holding company that owns a bank and an insurer in Kazakhstan. One option under discussion could involve Ibragimov trading his family’s stake in those companies for part of the value and paying the rest in cash, according to one of the people.
The negotiations are taking place at a moment of increased political and investor interest in the mining sector as the west competes with China to get better access to the metals needed to build out AI and clean energy infrastructure.
Shukhrat Ibragimov, Sabir Chodiev and Eduard Surlevich did not respond to direct requests for comment.
ERG told the Financial Times it did not comment on conversations between its shareholders. “If any, such discussion would be by default private. We are focused on doing our mining and metals work, and there are no changes to business as usual,” it said in a statement.
The elder Chodiev studied at the Moscow State Institute of International Relations, the elite Soviet spy school, and worked as a diplomat before joining forces with Machkevitch and Alijan Ibragimov. Alijan was the mining specialist among the trio and early on identified his son as a future chief executive of the company.
One person with knowledge of the situation said the Kazakh government was keen for ERG to have a majority shareholder with a long-term vision, suggesting it might support Ibragimov’s attempt to gain greater control. The Kazakh government did not respond to a request for comment.
ERG is among Kazakhstan’s largest employers and has said its operations represent more than one-third of the country’s metals and mining industry. The company also owns a collection of mines in DR Congo that are a key source of copper and cobalt, and which have previously attracted interest from potential buyers.
Additional reporting by Polina Ivanova in Berlin
