Lawmakers in Kyrgyzstan are again trying to force Toronto-based Centerra Gold, the country’s largest foreign investor, to renegotiate the terms of a mining deal that generates up to 12 percent of GDP. Any new operating contract would be the third for the country’s flagship Kumtor Gold Mine in less than a decade.
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 nationalization threats.
Mirage-like, a slinky piece of asphalt appears on the horizon after hours of driving across the dusty Gobi Desert. What’s coming into sight is the only paved surface for miles around. Yet many trucks are driving alongside the new highway, not on it.
Twenty years ago, when a Dutch cyclist named Rik Idema first passed through Mongolia on a round-the-world biking trip, the country struck him as the most pristine place he'd ever seen. Captivated by the steppe’s stark beauty, Idema later returned to explore the country with a Mongolian friend, Tseren Enebish. They started Tseren Tours together in 1994 and eventually married.
Two new studies say that Kumtor, Kyrgyzstan’s largest gold mine, as well as a major government revenue source, routinely ignores national environmental legislation and restricts access to independent auditors. The mine’s operations could have a far-reaching, detrimental effect on Central Asia’s water supply, one of the reports suggests.
The recent discovery of hydrocarbon and mineral deposits in Tajikistan has the potential to transform what is now Central Asia’s most economically disadvantaged nation. Whether the Tajik government can take full advantage of the opportunity will depend greatly on its ability to offer foreign investors a higher comfort-level.
In another grim sign for foreign investors in Kyrgyzstan, a parliamentary probe into operations at the Kumtor gold mine has some experts worried that officials are angling to nationalize one of the Central Asian country’s most valuable assets.
Cash-strapped Kyrgyzstan has a potential fix for its fiscal woes. Experts say the country is capable of doubling its gold production within a decade and reaping a financial whirlwind. Yet it’s no sure thing that officials will get their regulatory act together to make that happen.