Shariah opportunities in Kazakhstan’s junior mining companies

GMW Capital has launched Kazakhstan’s first Shariah compliant PE mining fund, aiming to leverage off geological findings by the former Soviet Union administration to validate deposits where valuable mineral resources can be extracted.

Aiming to raise at least US$100 million in commitments by the end of 2026, this fund will invest in equities in junior mining companies that conduct exploratory activities to confirm the economic viability of mineral deposits, CEO Arman Batayev told IFN Investor.

“We are targeting 10-12 projects, with an average investment of around US$10 million each. The fund is structured as a closed-ended vehicle with a seven-year life cycle, including a three-year active investment period. We will make cash calls as and when we identify projects, and we aim to start exits from year five.”

Returns for the fund are expected to be well above industry averages. “PE funds globally target around 18% annually. We are aiming for 20-25% per annum.” Arman is bullish on prospects as this East European nation is among the world’s top mineral producers of uranium, chromite, iron, titanium, zinc, gold and more. Kazakhstan also has significant rare earth deposits.

But as noted in a 2021 World Bank review, “Kazakhstan is underexplored. Greenfield exploration has been almost non-existent for about 30 years, and the substantial geological data acquired prior to its independence is incomplete or outdated”.

In structuring this fund since January 2025, GMW Capital relied on the strength of its internal team of geological experts and financial experience to mitigate risks, explained Arman. For Shariah compliance, a Pakistan Shariah advisory was appointed.

Thus far, the fund has already attracted commitments from some firms in China seeking to diversify mineral supply sources. GMW Capital will be seeking potential investors from Europe and the Middle East as well.

The fund manager is mainly talking to mining companies to be investors – as they can later partner to exploit discoveries or buy out rights to the confirmed deposits. The fund sticks to explorations and does not invest in mineral extractions – which need a much larger capital outlay.

“We also have strong connections with Qatar Mining. That was one of the main reasons we obtained the Shariah compliance certificate.” Arman said this certification could also attract potential interests from Saudi Arabia.