Kazakhstani moguls Kim and Novachuk sell their biggest Russian asset

Trianon Limited, a company controlled by Kazakhstani billionaires Vladimir Kim and Oleg Novachuk, has sold its Baimskaya gold and copper project in Chukotka to Northern Aurora, a Russian closed mutual investment fund. In early May 2024, the U.S. added the Baimskaya mining company to its sanctions list.

According to the Russian Business Register, 99% of Baimskaya Holding, which controls GDK Baimskaya (the Baimskaya mining complex), belongs to Northern Aurora. The remaining 1% is controlled by the Baimskaya Managing Company, established by Northern Aurora. The managing company of the mutual fund itself is RusCapital.

Trianon Limited acquired Baimskaya from KAZ Minerals, also controlled by Kim (63.5%) and Novachuk (36.5% through Nova Resources B.V.) in July 2023.

KAZ Minerals purchased this project from Aristus Holdings Limited (its final beneficiaries are Roman Abramovich and Alexander Abramov) for $900 million. KAZ Minerals acquired 75% of the project in 2019 and bought out the remaining 25% in 2021.

GDK Baimskaya planned to process about 70 million tons of ore to produce 300,000 tons of copper per year within the first ten years. The planning horizon for the GDK was more than 50 years, with total investment expected to be $8 billion.

However, after Russia’s full-scale invasion of Ukraine in 2022, KAZ Minerals faced serious obstacles in running the Russian project. VTB Bank, which serviced the group, was hit with Western sanctions, leading KAZ Minerals to a technical default as the company couldn’t service its debt to the bank ($1.78 billion out of $3.62 billion in total credits).

In November 2022, some media outlets reported that KAZ Minerals might postpone the launch of GDK Baimskaya and the commissioning of its main floating nuclear power plant. The plant was supposed to be built by Rosatom to supply energy to the entire project.

In December 2022, Russian President Vladimir Putin gave his consent for Trianon Limited to realize its ownership rights over GDK Baimskaya.

The Baimskaya project area, discovered in 1972, includes 12 prospective copper, gold and silver fields. For instance, the Peschanka field within the Baimskaya project area is believed to contain 9.9 million tons of copper (under the JORC code) with a content level of 0.39% and 16.6 million ounces of gold with a content level of 0.21 grams per ton. The licensed area covers 1,300 square kilometers.

Vladimir Kim is the fourth richest person in Kazakhstan, according to Forbes.kz. Over the past twelve months, his wealth decreased by $1 billion to $3.6 billion due to the disposal of GDK Baimskaya from KAZ Minerals. As some media outlets reported, Trianon Limited acquired the asset for just $200 million, even though KAZ Minerals had bought it from Abramovich for $900 million. Consequently, KAZ Minerals reported $2.67 billion in losses on this project.

Oleg Novachuk is ranked 34th on the list of the richest businessmen in Kazakhstan, according to Forbes.kz. Through his Nova Resources B.V., he controls a 36.5% stake in KAZ Minerals Ltd, where he also serves as the chair of the board of directors. Together with Kim, he owns Trianon Limited. His other company is Finaccord Limited, registered in the AIFC.