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KYRGYZSTAN: Mining Sector in Nationalists’ Crosshairs

BISHKEK, Oct 11 2012 - When nationalist MP Kamchybek Tashiev led his supporters over a fence surrounding parliament in early October, both foreign and local executives working in Kyrgyzstan’s mining industry braced for the worst.

Throughout the year, the sector has been cloaked in uncertainty, with foreign investors confronting regulatory hassles and nationalisation threats.

Tashiev, the leader of the opposition Ata-Jurt faction in parliament, succeeded in scaling the wrought-iron barrier – but, amid calls to nationalise Kumtor, a part-Canadian-owned gold mine – his alleged attempt to seize control of the government failed. With Tashiev and two confederates now behind bars, representatives of the extractive industry are breathing a little easier. But the sector will never enjoy peace, they say, as long as mines are entangled in political power plays.

The events of Oct. 3 may turn out to be the climax in what had been an escalating confrontation between miners and mobs. Just days prior to the episode, the new prime minister had announced “with authority” that Kumtor, whose operations accounted for roughly 12 percent of Kyrgyzstan’s GDP in 2011, would not be nationalised, and that mineral extraction would be a core economic priority for his newly formed government.

Mining firms were quick to applaud the premier’s vow to fill the State Agency for Geology and Mineral Resources (responsible for overseeing licenses) with sector specialists, rather than patronage appointees, as had been the tendency under previous governments.

Prime Minister Jantoro Satybaldiyev’s statements were meant to end a challenge to Kumtor’s legal status, initiated on ostensibly environmental grounds by a Tashiev ally, Sadyr Japarov, earlier this summer. In June, a commission led by Japarov failed to convince the legislature that the gold giant’s alleged ecological transgressions warranted expropriation.

With corruption cases looming against both Tashiev and Japarov, the duo subsequently decided to take the debate into the streets.

Orozbek Duisheyev, president of the Association of Miners and Geologists, a non-profit that liaises between mining companies and the government, criticised the pair’s ecological arguments. “(Tashiev and Japarov) are members of the legislative branch – lawmakers – and they create this kind of chaos? These people aren’t environmentalists, they are agents provocateurs. This behaviour must be severely punished,” Duisheyev told

If Japarov and Tashiev were playing a mining card to defend their personal interests, they were doing so because it is one of the most effective in Kyrgyzstan’s political deck. Since President Kurmanbek Bakiyev was ousted in April 2010, conflicts between mining companies and rural communities have been a regular feature of Kyrgyzstan’s political life. While supposed environmental violations are often cited during rallies, miners suspect the protesters are pawns in conflicts between marginalised elites and the central government in Bishkek.

“Mining companies certainly have a responsibility to abide by domestic and international environmental standards,” said a manager of a gold and copper mining firm, an expatriate with many years’ experience in Kyrgyzstan, who discussed the topic on condition of anonymity. “But to plan for, and anticipate shifts in clan politics – that shouldn’t really be part of our job.”

Centerra Gold, Kumtor’s parent company, did not respond to repeated requests for comment.
Kumtor is not alone in facing operational threats; there is scarcely a mine in Kyrgyzstan untouched by scandal.

In August, locals threatened to burn down the mine of Asia Gold Enterprises – a Chinese-owned firm working in the southern region of Chon-Alai – over concerns about river pollution. The company responded by offering villagers one percent of its operational profits. Villagers agreed and backed off. Earlier this year, the company was also accused of illegally exporting ore.

And in the western province of Talas, after parliament voted in June to suspend the license of Australia’s Kentor Gold on environmental grounds, the firm submitted itself to a rigorous environmental audit that has found little reason for concern.

The long-term prospects for these and other operations may depend less on environmental concerns and more on the government’s ability to enforce order in the countryside – especially in regions where hostile rivals wield influence.

Compared with Kumtor, these mines are small. Kentor Gold believes their Andash field will yield only 10-15 percent of the gold coming out of Kumtor. But the smaller mines are far more vulnerable to protesters. Attempts to nationalise Kumtor in 2003 and 2007 failed, while licenses for smaller outfits have been repeatedly revoked in the past.

Miners are not the only ones concerned by the nationalist opposition’s behaviour. According to Emil Shukurov, head of the ecological non-profit Aleyne and the editor of Kyrgyzstan’s Red Book of endangered species, Kyrgyzstan has “more serious environmental problems” than Kumtor.

Though he believes the mine commits “minor” environmental violations, “this goes with the territory (of mining),” Shukurov said. He complains that opposition rabble-rousing distracts from other important ecological debates, such as protecting biodiversity. Politicians pick and choose their environmental hang-ups, Shukurov added: “Ecology should not be a subject for political speculation.”

*Editor’s note: Chris Rickleton is a Bishkek-based journalist.

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