Kazakhstan is introducing higher taxes, royalties, and state involvement in mining, shifting away from its investor-friendly 2018 reforms. Western companies remain interested in the country's vast mineral resources but are concerned about regulatory instability and transparency. The government is attempting to balance national interests with foreign investment, but growing intervention risks undermining investor confidence. Changes to the tax code and sub-soil use law enacted over the last few months have raised eyebrows among Western miners and investors. "We respect the rights of the government and of the people to receive benefits from the resources that are extracted," said James Banyard, exploration manager for the Canadian firm First Quantum Minerals. "What we don't love is, kind of, the constant changing of legislation." Last year, the Kazakh government basically locked down the uranium sector for state-owned Kazatomprom as nuclear power sees something of a renaissance globally. The government additionally upped taxes on uranium, silver and gold. The government also introduced a long-awaited, western-style royalty system, replacing the clunkier, Soviet-inherited mineral extraction tax. But the royalty system only applies to new operations licensed from 2027 onward. And the royalties to be paid are significantly higher than those in some other jurisdictions. For example, they are double the rates in Western Australia, according to Maxim Kononov, first deputy director of the Republican Association of Mining and Metallurgical Enterprises, a trade group. "On whole, we can say without question that the trend is obviously toward an increase in the budgetary tax burden," Kononov told a Minex panel April 16. But it's changes in the sub-soil use code that caused the most chatter among mining executives. Last year's changes reintroduced a licensing priority for companies that promise to build processing operations in addition to extraction, and there are now discussions in parliament about giving the state mining company, Tau-Ken Samruk, the first bite at licenses, too. The government is also getting involved in mineral exploration, announcing the allocation of about $500 million for the exploration of 20 projects across the country in February. "These changes that are taking place, they're always attempts to balance the interests of investors and the state. Business and government are always looking for that balance. It'll never work that business gets everything and government nothing," said Ruslan Baimishev, president of the Kazakhstan Chamber of Mines. "I consider the current rules of the game a fairly good balance." The chamber did oppose the return of licensing priorities, but is pleased that new guardrails are in place, such as a requirement that the prime minister and president must sign off, he said. Some industry insiders are less sanguine about the shifts in government policy. The 2018 reforms have been steadily eroded since 2023 with the government intervention in exploration, introduction of royalties only for new operations, and especially the return of priority licensing, said Timur Odilov, an Astana lawyer who helped draft the reforms. A rollback will lead investors "to start to think we are not a reliable jurisdiction," Odilov told Eurasianet. "We are now in the process of getting back to the non-transparent system of allocating the licenses." Diplomats at the Astana forum spoke glowingly of Kazakhstan's prospects but echoed some of the miners' concerns. "What we don't like quite so much is that the reform process is not always linear, and there have been some challenges for investors here," Sally Axworthy, the British Ambassador to Kazakhstan, said during a panel discussion on April 15. "Kazakhstan's a regional leader, but we really hope that they will maintain that consultation with industry before making any changes." Western miners and officials – and companies with Chinese partners too – talked a good game at the forum about ensuring the minerals they want to secure will benefit Kazakhs. Many of the modifications Kazakhstan is making are aimed, in theory, at forcing international players to put their money where their mouth is. But it's a delicate balance. Kazakhstan has been locked in legal battles with international majors for years in the oil industry. After the country won billions from an international consortium in a January arbitration decision, Shell paused investment in the country, Reuters reported. Banyard, from the Canadian mining firm, said the government has "heard our concerns" and the changes haven't yet impacted his company's investment decisions, but the slight shift in the winds has "red flags" flapping. The 2018 reforms prompted First Quantum Minerals' decision to look at Kazakhstan. Yet, the recent changes on priority rights and the government exploration push make it seem like the government is setting itself up as a "competitor" to the private sector, Banyard said.