Azerbaijan Presidential Decree on Measures for Development of Mining and Metallurgy Industries

Mechanism

The decree operates on three simultaneous levers:

1. State-program drafting mandate. The Ministry of Economy, in coordination with the Ministry of Ecology and Natural Resources, the Ministry of Finance, Azerbaijan Investment Holding, AzerGold CJSC, and other relevant state bodies, must submit the draft "State Program for the Development of Mining and Metallurgy in the Republic of Azerbaijan for 2027-2030" to the Cabinet of Ministers within three months; the Cabinet then has one additional month to submit it to the President. This binding four-month clock anchors an entire pipeline of sector-specific investment decisions.

2. Azeraluminium LLC production targets. The decree sets quantitative milestones: completion of the electrolysis plant to 100,000 tonnes/year by 2030, and aluminum rolling capacity to 50,000 t/y by 2030. These are not aspirational targets — they are embedded in a presidential decree, which in Azerbaijan's executive-led system carries the force of a binding state directive.

3. SOE consolidation and financial clean slate. Azerbaijan Aluminium OJSC (the legacy state-owned entity) is to be liquidated, with all its assets transferred to Azeraluminium LLC. Outstanding debts and tax liabilities are cancelled. This effectively resolves legacy balance-sheet drag accumulated under the prior OJSC structure and resets the sector's financial footing ahead of the 2027-2030 programme period.

Context and strategic framing

Azerbaijan's mining sector has historically been subordinate to hydrocarbons in national economic planning. The April 2026 decree signals a structural rebalancing — using SOE-led aluminum expansion and a formalized state program to diversify export revenue and employment away from the oil-and-gas dependency that has defined the SOCAR-led economic model.

The decree fits the Central Asia + Caucasus pattern of foundational sectoral-minerals state programs: structurally analogous to Mongolia's Critical Minerals Support Law (January 2025), Uzbekistan's Critical Minerals National Programme (March 2025), and Pakistan's National Minerals Harmonisation Framework (April 2025). In each case, an executive decree or law creates a planning horizon (typically 5-10 years) with embedded SOE-investment mandates and targets, rather than relying solely on FDI-attraction frameworks.

For Azerbaijan, aluminum is the primary vehicle: the country hosts significant bauxite-bearing geology in the Dashkasan district, and Azeraluminium's Ganja smelter is one of the few non-Russian, non-Chinese primary aluminum smelters in the post-Soviet space. A 100,000 t/y target would represent a meaningful increment relative to current sub-scale output and positions Azerbaijan to capture a share of the premium placed on FEOC-clean (Foreign Entity of Concern-free) aluminum by US IRA provisions and EU CBAM carbon-border adjustment requirements.

The decree also anchors the bilateral context established by the US-Azerbaijan Charter on Strategic Partnership (signed February 2026, filed as 2026-02-10-us-azerbaijan-charter-strategic-partnership), which explicitly included critical-minerals cooperation as a pillar of the bilateral agenda.

Downstream implications

• The four-month state-program drafting clock runs to approximately August 2026; the final document

will set sector-specific investment ceilings, royalty/offtake frameworks, and eligible foreign partner criteria for the 2027-2030 window.

• Azeraluminium LLC is the operating entity to watch: once the OJSC liquidation completes and the

state program is approved, the LLC may seek a strategic investor or offtake agreement to co-fund the 100,000 t/y electrolysis expansion — attractive to Western aluminum buyers seeking FEOC-clean supply chains outside China and Russia.

• AzerGold CJSC (gold and base metals) is listed as a co-drafting partner, suggesting the state

program will cover the broader metal-ores sector (copper, gold, silver), not solely aluminum.

• Legacy-debt cancellation removes a potential obstacle for IOC or WB/EBRD co-financing; expect

Azerbaijan Investment Holding to lead international roadshows once the program is published.

Open questions

• Final text of the decree (decree number, full Russian/Azerbaijani original) was not yet indexed

on president.az/en at time of filing — the canonical article URL will be president.az/en/articles/view/{id} once published.

• Will the state program for 2027-2030 set formal royalty-rate or export-levy structures for metal

ores, or leave those to sector-specific subordinate legislation?

• Does Azeraluminium's 100,000 t/y target assume greenfield electrolysis capacity or expansion of

the existing Ganja smelter lines?

• Is there a parallel provision for the Dashkasan copper-cobalt deposit (operated by AzerGold) to

receive a domestic-processing mandate analogous to Indonesia's hilirisasi template?