Kyrgyzstan will soon be issuing licenses for mining critical raw materials (CRM), which would have been almost unthinkable five years ago.
However, a lot has changed in Kyrgyzstan, where a new president came to power in late 2020 and has since radically changed the form of leadership and is seeking new sources of revenue.
A lot has changed in the world also, as governments are realizing the importance of CRMs for their economies and are scrambling to find supplies.
Past Experiences
Kyrgyzstan does not have significant reserves of natural gas or oil as most of the other Central Asian countries do.
It was clear from the first days of independence that Kyrgyzstan’s main source of export revenue would come from mining, and Kyrgyzstan has significant deposits of CRMs.
The Kumtor gold mine, 4,000-meters high in the mountains on the south part of the massive Lake Issyk-Kul, quickly became the economic savior for a country where most exports were agricultural products. Initial estimates put gold reserves at Kumtor at some 514 tons, but subsequent exploration revealed more gold at the site.
Kumtor was a joint venture with Canadian company Cameco, but over time Cameco acquired nearly 75% of the project.
There was environmental damage at the site that almost completely destroyed two nearby glaciers – Davidov and Lysiy.
The most infamous incident involving Kumtor occurred in May 1998, when a Kumtor truck overturned into the Barskoon River, dumping nearly two tons of sodium cyanide into the water. Thousands of people were evacuated from area, several died, and business at Issyk-Kul, Kyrgyzstan’s premier tourst attraction, plummetted.
The example of environmental problems at Kumtor turned public opinion in Kyrgyzstan against mining projects.
Some 20 year later, the issue again came to the fore over the Kyzyl-Ompol uranium site in the Tong district of Issyl-Kul Province.
In April 2019, nearly 30,000 people signed a petition to halt work at Kyzyl-Ompol.
Anti-mining sentiment grew and by October 31, 2019, Kyrgyzstan’s parliament approved a moratorium on exploration and extraction of uranium and thorium that was signed into law in December that year.
Something Everyone Wants
The European Commission wrote that CRMs are crucial for “producing a broad range of goods and applications used in everyday life and modern technologies,” and noted, “Reliable and unhindered access to certain raw materials is a growing concern within the EU and across the globe.”
Additionally, the attempts by many nations to wean themselves off fossil fuels have led to a surge in countries seeking to construct nuclear power plants (NPP) to meet their energy needs.
There are currently some 440 operating NPPs in the world, 60 new reactors are under construction, and another 110 are planned to be built.
Current President Sadyr Japarov rose to power after Kyrgyzstan’s revolution in 2020. Japarov, who is from the Issyk-Kul area, was an opponent of foreign ownership of the Kumtor gold mine, and in 2021 his government forced out Canadian company Centerra (which took over from Cameco in 2004).
Kumtor was placed under government control, but after some 30 years of extracting gold, the site is staring to become depleted.
That fact, and the recent surge in interest in CRMs, led Japarov’s government to the most obvious source for fresh revenues – the resumption of exploration and exploitation of mining sites with CRMs.
In early February 2024, President Japarov signed a decree on a national project for extraction of polymetals and rare earth elements. Later that month, Japarov traveled to the Kyzyl-Ompol area where local opposition had closed the uranium mining operation in 2019.
Japarov told locals that Kyzyl-Ompol was a second Kumtor and that a state company would be created to work the site so that all the profits would remain in Kyrgyzstan, and people of the area would see reap huge benefits from the project.
Japarov said the focus of mining would be on thorium.
Thorium is already used in nuclear reactors in combination with uranium and plutonium, but new molten salt reactors using thorium are being designed that promise to have significant advantages over their uranium counterparts.
Molten salt reactors operate at higher temperatures, generating more electricity. Their low operating pressure reduces the loss of coolant in an accident, making them much safer than contemporary reactors. They also produce less high-level waste.
Japarov’s visit to the Kyzyl-Ompol area was perfunctory. It was clear his government had decided on moving ahead with plans to resume mining at numerous sites. His visit was likely also a reminder that his government would not tolerate protests as previous governments had.
Japarov explained the benefits of opening the Kyzyl-Ompol site, but he was not offering a choice.
Parliament adopted a measure lifting the moratorium on uranium mining on June 11.
Months before that, officials were already talking about which sites to open.
On February 8, parliamentary deputy Balbak Tulobayev proposed starting mining uranium and other rare earth elements. In early March, the Ministry of National Resources proposed changing the borders of the Chong-Kemin National Park, near the border with Kazakhstan, so that the Ak-Tyuz and Oktokoi fields were removed from the park and made available for mining.
On May 10, President Japarov signed amendments to the laws on subsoil use and biosphere territories. The amendments allowed the Cabinet of Ministers to authorize the exploration and development of mining sites.
In July, the security service said a state-owned enterprise would be created to control mining companies’ activities.
The Future
Kyrgyzstan is a poor country that could benefit greatly from exporting CRMs, and the government has posted a long list of promising sites. However, Kyrgyzstan does not have the finances or the equipment to develop these sites on its own and will need foreign investment and help.
That could be difficult after Kyrgyz authorities forced out Canada’s Centerra from the lucrative Kumtor gold mine just three years ago.
Barely a week after the moratorium on mining was officially lifted, Kyrgyzstan’s government was calling on domestic and foreign investors to help develop Kyrgyzstan’s mining industry.
On September 25, Chairman of Kyrgyzstan’s Cabinet of Ministers Akylbek Japarov (no relation to the president), officially launched the start of work at Kyzyl-Ompol. However, there have been incidents in recent months that remind of the dangers from the mining industry.
In early October, there was news a Chinese company mining coal in Kyrgyzstan’s southeastern destroyed parts of a glacier to construct a road to the mining site.
At the start of June, a truck carrying radioactive waste from a Soviet-era dumping site overturned in the Min-Kush River in eastern Naryn Province, evoking memories of the Kumtor truck with sodium cyanide that fell into the Barskoon River 26 years earlier.
The matter of clean-up of mining sites was raised in parliament.
Deputy Dastan Bekeshev pointed out that more than 30 years after the collapse of the Soviet Union, Kyrgyzstan was still depending on Russia and the European Bank for Reconstruction and Development to clean up Soviet-era waste sites on Kyrgyz territory. Bekeshev asked where Kyrgyzstan would find the money for remediation of the sites that the government is planning on opening.
The Kyrgyz authorities are already in talks with Chinese company Zhicun Lithium Industry Group about lithium mining opportunities.
The Kyrgyz government is eagerly awaiting more foreign companies and undoubtedly the coming months will see new partnerships for mining projects, but hanging over this potential El Dorado is Kyrgyzstan’s personal experience of mines that left the environment and people’s health damaged.
