Kyrgyzstan goes to nationalize gold mine run by Canadian company Business and Economy News

Bishkek and Issyk-Kul region, Kyrgyzstan – In the early 1990s, a large gold mine in eastern Kyrgyzstan, near the Chinese border, was expected to bring the new economy of the independent country out of the ruptures of Soviet central planning.

After 30 years since Kumtor came into operation, it has come to symbolize for many the greatest evils in the developing world: corruption, environmental degradation, and neocolonial greed.

In May, it became clear that dark clouds were gathering at Centerra Gold Inc, a Canadian-registered company that operates a high-grade mine, 26% of which belongs to the Kyrgyz state.

First, a court ruled that the mine committed environmental violations by spilling
exploitation of glacier debris, which gradually led to erosion and cost the state $ 3 billion.

Shortly afterwards, parliament backed a proposal by a special committee on Kumtor to include state management in the mine for three months.

On May 14, President Sadyr Japarov approved the plan, which effectively brought the mine into the hands of the state.

Later, several senior politicians accused of financial crimes related to Kumtor were arrested.

In the face of this, the Gold Center initiated binding arbitration proceedings against the government on the grounds that it was violating mutual agreements.

Its units in Kyrgyzstan (Kumtor Gold Co. and Kumtor Operating Co.) went bankrupt in U.S. court and the company says it will seek compensation from the government.

“In 1994, when the Kyrgyz gained independence and with your help, we started building Kumtor Gold Ore with an early life of 18 years. To date, what we have created together is something special that comes from studying around the world to engineers,” wrote Scott Perry Center President and CEO.

“The mine hijacking is based on false information and baseless allegations that undermine everything built together. We fear it will jeopardize the businesses of hundreds of well-paid jobs and hundreds of surgical providers without unjustified government action.”

It is perceived as a “source of elite enrichment”

The pressure on the Center intensified after the January presidential election Japarov achieve victory after a campaign that promises national revival.

As a result of the debate over political corruption and the controversial parliamentary elections last October, he was appointed the country’s interim president and prime minister, the third incident since the country’s independence.

And it was gold that brought him to power.

A few months before he won a landslide, he was released from prison and was serving an 11-and-a-half-year sentence for kidnapping a local official during a protest against Kumtor.

Since 2013, he has been a major figure in the movement against foreign corporations accused of exploiting Kyrgyzstan’s scarce resources.

A general view shows the Kumtor open pit gold mine about 4,000 meters (13,123 feet) above sea level in the Tien Shan Mountains in Kyrgyzstan. [File: Vladimir Pirogov/Reuters]

He believed that the country’s elite would reap benefits to the detriment of the people and the environment.

Many citizens shared their opinion.

“For more than 30 years in the mining-based economic model, the extraction of natural resources was perceived by populations as another source of wealth for elites,” Asel Doolotkeldieva, a surgeon in the capital’s Bishkek surgical policy, told Al Jazeera.

“They believe that investors, along with the elites, get rich as soon as they get rich, immerse themselves in resources and drain resources.

“The mining industry provides only 3% of employment nationwide. Mines are being exploited, resources are being depleted, government is becoming richer, but local communities, despite some development and charity projects, are not seeing a direct impact on their lives.”

Kumtor is located in the Issyk-Kul region, one of the highest gold mines in the world, and is also the birthplace of President Sadyr Japarov. [Agnieszka Pikulicka-Wilczewska/Al Jazeera]

At the same time, they are concerned about the environmental damage caused by the mine.

“The debris is being stored in glaciers, and it is estimated that after the completion of Kumtor’s exploitation, it will weigh 1.8 billion tonnes. It will stay there and affect the environment. Glaciers are one of the sources of water in the Kumagai River, which flows into the Taragai River and then into the Naryn River – the Syr Daria, the largest cross-border river in Central Asia, ”environmentalist Kalia Moldogazieva told Al Jazeera.

“We have spoken out against the Kumtor project from the beginning because it is in the glacier area. Glaciers are melting due to global warming and in Kumtor it is also caused by anthropogenic factors. ”

Miner support for Japarov

In February 1995, Murat was unprepared for work. The temperature was -45 degrees Celsius (-49 degrees Fahrenheit) when his feet first touched the mountain he wanted to be proud of in Kyrgyzstan.

The dry icy wind at 4,000 meters above sea level made it difficult to breathe.

“I’ve never seen anything like it. We felt like we were on another planet, “said Murat, 59, who worked for Kumtor for eight years. [company bosses] he invited us to dinner in a restaurant-like room. Then they gave us canned coke. It was the first time I saw it. “

He left in 2003, and by then had managed to build a house on Lake Issyk-Kul, which was of Japarov origin, and spent many years with his relatives.

Murtor said Kumtor’s job was hard, but he was a fair employer.

Overtime was paid double, safety was always a priority and he was grateful that he could work with the latest technology.

“Every five years we received medals, clothes, gifts. They were good to us and to the time
we were thinking only of ourselves, our families, money. Everyone wanted to get rich. ”

Kyrgyz President Sadyr Japarov speaks in Bishkek (Kyrgyzstan) on April 11, 2021, after voting in constitutional referendum [File: Sultan Dosaliev/Kyrgyz Presidential Press Service/Handout via Reuters]

But over time, Murat changed his mind. Today, he is pleased with President Japarov’s nationalist reform agenda.

“Kyrgyzstan was not ready for that. We agreed to extract gold too early. Our technology was not good enough to operate in the mountains, in the cold. Now we deserve Japarov. We ended up lying. “

Murat shows photos from the Kumtor years and takes on a nostalgic mood.

Shortly afterwards, he goes in search of a small book: poems written by his supporters while he was in prison for Japarov.

“Let Sadyr be released! He will get the job! He was punished for no reason, if someone like him comes to power, he will clean our country of dirt. “

General view of the Kumtor mine in Kyrgyzstan [File: Vladimir Piragov/Reuters]

Additional report by Aigerim Turgunbaeva: @AigiTurgunbaeva