There is a city in Romania called Baia Mare, where gold has been mined since the days of the Roman Empire. In recent decades, gold extraction at a local plant involved the use of a highly toxic substance — cyanide. In the year 2000, an environmental disaster occurred: a dam broke, and 100,000 cubic meters of cyanide-contaminated water spilled into the Someș River, eventually reaching the Tisza and Danube Rivers. This catastrophe is now considered the worst environmental disaster in Europe since the Chernobyl nuclear accident. Even the band Rammstein wrote a song about the incident.
After this disaster, gold mining in Baia Mare ceased. But in 2008, the non-operational companies Romaltyn Mining SRL and Romaltyn Exploration SRL, which owned the gold processing facility, were acquired by Russian company Polyus Gold. Through an offshore entity called Romaltyn Limited, Polyus invested in modernizing the mining technology and built a new water purification station. However, actual gold extraction never resumed — environmental groups, local activists, and Romanian regulators remained opposed.
In 2012, Romaltyn Limited was sold for $20 million to the Kazakh company SAT & Company JSC, owned by young Kazakh oligarch Kenes Rakishev. In 2013, Moldovan businessman and former Prime Minister of Moldova Ion Sturza joined the project as an investor. The deal included a plan to invest around $40 million into waste processing and environmental rehabilitation.
Yet local authorities, environmentalists, and activists — still remembering the 2000 disaster — continued to oppose the project. As a result, gold mining never resumed. In 2016, Ion Sturza exited the project, and full control of Romaltyn returned to Kenes Rakishev.
The Kazakh media referred to Rakishev as a “successful investor,” but he decided to rid himself of the loss-making asset — and shift the losses onto the state of Kazakhstan.
The scheme was straightforward:
Rakishev’s company took out a loan from BTA Bank, where Rakishev himself was Chairman of the Board.
The loan was secured by the Romanian asset — Romaltyn Limited.
In January 2018, 100% of Romaltyn’s shares were transferred to BTA Bank as debt repayment. According to the bank’s reports, the value of Romaltyn was listed at 23.9 billion tenge (roughly $74 million at the time).
In essence, the bank handed over real money to its own owner, and in return received a non-operational gold processing plant in Romania, massively overvalued. And then, the inevitable happened: by the end of 2020, BTA Bank’s investment in Romaltyn was fully written off as a loss.
It is important to remember that the State of Kazakhstan had previously rescued BTA Bank from bankruptcy. In February 2009, through the Samruk-Kazyna Sovereign Wealth Fund, the government acquired 75.1% of the bank’s shares, investing around 212 billion tenge (approximately $1.5 billion USD) for recapitalization.
Less than ten years later, BTA Bank ended up in the private hands of Kenes Rakishev (how that happened is another story), and remains under his control to this day.
What’s the result? The Kazakh taxpayers ultimately paid for Rakishev’s “successful investment” in Romanian gold mining — a project that never even started. Meanwhile, the oligarch received $74 million by taking out a loan backed by a worthless asset.
The Review
Kenges Rakishev’s “successful investment” in Romanian gold mining
The Kazakh taxpayers ultimately paid for Rakishev’s “successful investment” in Romanian gold mining — a project that never even started. Meanwhile, the oligarch received $74 million by taking out a loan backed by a worthless asset.
