Kyrgyzstan to launch new mining enterprises

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BISHKEK (TCA) — A processing plant at the Kuru-Tegerek copper and gold mine located in the Chatkal district of the Jalal-Abad province in southern Kyrgyzstan would start operating at the end of 2017.

Geological preparatory works are currently being conducted and the processing plant and other industrial and administration facilities are being built.

The reserves of underground resources at Kuru-Tegerek include about 98 tons of gold, more than 370 thousand tons of copper, and significant reserves of silver.

The deposit is developed by a Chinese company. About 400 local employees and the same number of foreign personnel are now working in the field but after the mine is launched, locals will become a majority, the mine managers said.

Ambitious goals of new Committee

Recently, taking into account the importance of the mining sector, the State Committee of Industry, Energy and Subsoil (SCIES) was created on the basis of the State Agency for Geology and Mineral Resources.

The status of the new Committee is higher than of a ministry, as the ministry is just conducting sectoral policy while the new Committee coordinates cross-sectoral policies, said Committee Deputy Chairman Ulanbek Ryskulov, who was recently elected the head of the CIS Intergovernmental Council for Exploration, Use and Conservation of Resources.

The overriding objective of SCIES is to launch new production capacities and create jobs at enterprises. The SCIES is now considering several mining projects. There are deposits in the country that could not run due to the lack of power generating capacity. The new committee is trying to solve such issues. According to Ryskulov, two companies that own the license to develop the Sary-Jaz deposit have agreed to build a hydroelectric power plant on Sary-Jaz River in the Issyk-Kul region at their own expense.

The Shambesai gold mine will start operating in 2017. The deposit’s balance reserves are 7.8 tons of gold.

Shambesai, the only gold deposit discovered since the independence of Kyrgyzstan, is located in the Kadamjay district of the Batken province in the south of the country. All the other deposits, including the country’s largest deposits Kumtor and Jerooy, were discovered in the Soviet time.

Complying with local legislation

For successful operation of foreign investors, it is important that they comply with the legislation of Kyrgyzstan.

Investors usually face problems with the law because they do not fully understand local laws, so they have to seek the services of local lawyers, Ryskulov believes. For example, developers of Ishtamberdy and Taldy-Bulak gold deposits had problems, which have been eliminated and the investors are now working according to the project approved by the Kyrgyz Government.

President’s view

Over the past five years, the situation in the mining industry has changed radically, President of the Kyrgyz Republic Almazbek Atambayev said in his welcoming article in the August issue of the Russian “Mining Journal”.

The journal’s issue was dedicated to the 25th anniversary of Kyrgyzstan’s independence, which the country will celebrate on August 31.

According to the president, Kyrgyzstan has restored order in the mining industry, striving to make all the processes transparent and open.

Mining, one of the most promising sectors of Kyrgyzstan’s economy, accounts for 47% of the country’s industry, and 31.8% of foreign investments are involved in it.
Kyrgyzstan’s budget has received more than 8 billion soms ($130 million) from the mining auctions and tenders in the past three years.

It is vital to balance the interests of the State, investors and the local communities. One of the main problems of the mining industry is related to protests of the local population against mining companies’ operation. These problems continue to exist, although the number of protests has decreased, the president said.

“Advocacy should stand at the forefront in the development of all deposits, because the consent of the local population and environmental safety regulations should be observed,” he added.

About US $1.5 billion had been spent for the development of the mining industry in Kyrgyzstan from 1938 to 1991. During 20 years of independence, Kyrgyzstan spent 40% of that amount, but not one significant mineral deposit, except Kumtor, has been put into operation. The overwhelming corruption has led to a critical situation in the economy, the president explained.