Kazakhstan’s Fincraft Group is seeking to acquire Tethys Petroleum (CVE: TPL), a Toronto-listed oil and mining company, as part of a broader push to integrate upstream energy production into its expanding mining portfolio.
The move, announced in a non-binding letter of intent in September, also reflects Fincraft’s strategy to secure greater control over the Central Asian region’s critical resource infrastructure.
Fincraft, which trades on the Kazakhstan Stock Exchange, operates significant assets in nickel through Kaznickel, as well as cobalt and coal via Shubarkol Premium. It has previously held controlling stakes in London-listed gold miner Petropavlovsk and Central Asia Metals, consolidating its position as one of the region’s most diversified mining groups.
Sources close to the deal say Fincraft sees it that Tethys, which operates oil and gas fields across Kazakhstan, a rare opportunity to consolidate access to both mineral and energy assets within the same geography.
The group’s billionaire chairman, Kenges Rakishev, has long pursued cross-sector investments with a focus on scaling industrial ecosystems around core commodities.
A regular on the Forbes list of billionaires, Rakishev has previously launched ventures in blockchain, plant-based food production and tech start-ups, but in recent years has redirected his focus toward domestic industrial expansion, investing heavily in nickel extraction within Kazakhstan.
Through the proposed acquisition, Rakishev aims to integrate Tethys into Fincraft’s broader mining operations, securing access to energy reserves that could underpin future metals processing and export operations. The integration would also allow Fincraft to leverage Tethys’s existing oil and gas infrastructure to support logistics and industrial development across its mining network.
Kazakhstan’s resource bet
In the three decades since the collapse of the Soviet Union, Kazakhstan has built an economy heavily reliant on natural resources. Through state-owned mining firms, the country has become a leading supplier not only of oil and uranium but also of gold, copper, manganese and chromium.
For years, however, international miners steered clear of Kazakhstan, citing bureaucratic hurdles, opaque regulations and entrenched corruption. Despite its promise, the sector stagnated as new exploration opportunities dwindled.
Recognizing the problem, the government overhauled its mining code in 2018, drawing on Australia’s investment-friendly model to encourage exploration. While the reforms did not immediately trigger a wave of foreign investment, Western interest has begun to return. The number of exploration licences issued in 2024 nearly doubled the annual average of the previous six years, with known companies such as Ivanhoe Mines (TSX: IVN) stepping up prospecting efforts.
Fincraft’s move for Tethys comes at a moment when that shift in sentiment is beginning to take hold. Rakishev appears to be betting that Kazakhstan’s regulatory overhaul and renewed investor confidence have created a more stable environment for large-scale mining integration.
Investors complaint
Rakishev’s approach comes amid rising dissatisfaction among Tethys shareholders over corporate governance. One investor, Gazexport, publicly endorsed Fincraft’s proposal last week, citing what it described as weak oversight under chairman and chief executive Bill Wells. The shareholder said inadequate infrastructure at the Kul-Bas oil field, discovered in 2020, had caused frequent production interruptions and hindered growth.
Gazexport also criticized the management of Tethys’s gas assets, pointing to the lack of a formal supply agreement with the national operator QazaqGaz and to a decision to accept lower gas prices, which it said had caused losses of up to US$2.5mn. The company further noted the board’s failure to pursue a potential claim before the London Court of International Arbitration to uphold gas pricing terms under a 2019 supply contract.
“As a significant shareholder of Tethys, we have spent the last few months in discussions with management but have been disappointed by the lack of willingness to engage or provide Fincraft with representation on the board,” Gazexport said.
Earlier this year, Fincraft nominated a Kazakhstan-based director with extensive local industry experience to join Tethys’s board, but the proposal was rejected. The company has since cited the suspension of natural gas supplies for more than 18 months as further evidence of mismanagement.
If completed, the acquisition would mark one of the most consequential cross-border mining-related transactions led by a Kazakh investor in recent years.
