Protestors in Kyrgyzstan’s northwest have clashed with police and blocked a major road, alleging a Kazakh project to survey for gold is polluting the local environment. It’s the latest in a string of violent, mining-related clashes in the Central Asian state. Once again, mining experts in Bishkek are skeptical about the protestors’ motivations.
Early on April 3, several hundred protestors blocked the road leading from Talas, the largest town in Kyrgyzstan’s northwestern Talas Province, to Taraz, in Kazakhstan. By evening, the number had swollen to 500 and some reports circulated that two officials had been kidnapped. At least 19 police were wounded in a confrontation with stone-throwing residents, 24.kg reported, citing an Interior Ministry official.
The protestors are demanding Kazakh mining concern Altyn Kumushtak, which has been exploring the Shiraldjin gold deposit since 2005, stop. In an interview with Radio Liberty’s Kyrgyz Service, a self-identified participant in the riots, Nurlan Muzurov, said he and others “don’t want deformed children, pollution of the water and the air.”
In 2009, Altyn Kumushtak’s license had been annulled and given to a Chinese company in one of many murky exchanges during the presidency of Kurmanbek Bakiyev, who was ousted amid bloody street protests in 2010. In 2013 the Kazakh company successfully appealed and won back the rights to the deposit.
Lawmakers may have destroyed Kyrgyzstan’s reputation among investors in the process, but after a year of heated arguments, which often spilled out into the streets, parliament voted to accept a restructuring roadmap with the country’s largest investor on February 6. The arrangement evenly splits control of the Kumtor gold mine between Bishkek and Kumtor’s Canadian owners.
But Kumtor will probably remain divisive. Outside the high-altitude mine in Issyk-Kul Province, villagers have been holding another one of their periodic roadblocks in recent days, demanding concessions from the government and the mine. In a country with widespread unemployment and few opportunities, young men like those blocking the road this week are easily whipped into a fury. Many observers believe they are paid. The ostensible reason for the latest roadblock is the arrest of several local men last August on charges of trying to extort $3 million from the mine.
In the late-afternoon vote on February 6, after weeks of deliberation, 60 deputies voted for the resolution and 35 against. Two abstained and 23 were absent, according to a count published by AKIpress.
Under the agreement, Kyrgyzstan would trade its 33-percent share in Toronto-listed Centerra Gold for a 50-percent interest in a new company that would own and operate Kumtor. In 12 years, Kyrgyzstan would have the opportunity to purchase another 17 percent of the joint venture at market value.
Kyrgyzstan’s government has reached yet another possible restructuring plan with Toronto-listed Centerra Gold, which owns the country’s largest and most profitable mine. But the non-binding agreement must still be ratified by Kyrgyzstan’s self-serving parliament, which rejected a strikingly similar plan in October.
The high-altitude Kumtor gold mine is the largest industrial asset in the impoverished Central Asian nation, account for approximately 12 percent of GDP in a good year and over 50 percent of industrial output.
Restructuring negotiations, which would lead to the fourth operating agreement since Canadian miners started developing the Kumtor deposit in the mid-1990s, began after parliament voted in February to tear up a 2009 agreement, maintaining it was not in the interests of the country. Centerra countered that it has invested approximately $1 billion in the mine since signing that contract. Few believe Kyrgyzstan has the technical know-how to operate the project on its own.
The Kumtor mine has produced over 270 tons of gold since operations began in the mid-1990s.
Kyrgyzstan’s parliament voted overwhelmingly on October 23 not to accept a deal with Canada’s Centerra Gold, leaving the fate of the country’s only significant industrial asset, and the one-year-old government, uncertain yet again.
Eighty-four deputies voted to scrap a September 10 memorandum between the government and the Toronto-listed company that would increase Kyrgyzstan’s stake in the high-altitude Kumtor gold mine from roughly 33 percent to an even 50 percent. Two deputies voted to support the memorandum.
Later in the day, parliament demanded the government negotiate no less than a 67-percent share in the mine. That resolution also instructed the General Prosecutor’s office to open criminal cases connected with earlier iterations of the operating agreement, dating from 2003.
Earlier this year parliament demanded the government renegotiate a 2009 agreement with Centerra. The ongoing negotiations are the fourth since the mine began operations in the mid-1990s, which helps explain why a Canadian think-tank this year ranked Kyrgyzstan the world’s fifth-worst place to invest in mining. The government now has until December 23 to broker a deal. Should the two parties fail to agree, deputies vowed to break unilaterally the 2009 operating agreement. Since Kyrgyzstan does not have the cash to buy Centerra out, that move would likely look a lot like expropriation.
Kyrgyzstan’s largest investor has announced a tentative deal that would end months of gridlock over one of the country’s most valuable assets.
In a statement posted on its website September 9, Toronto-based Centerra Gold said
it had entered a “non-binding memorandum of understanding” with Bishkek that would see the Kyrgyz government trade its 32.7 percent interest in Centerra, plus $100 million in future profits, for a 50 percent stake in a joint venture that would own and operate the Kumtor gold mine. Kumtor, which has yielded about 270 tons of gold since 1997, is Centerra’s most productive mine.
In February, Kyrgyzstan’s parliament passed a resolution that required the government to negotiate a more lucrative deal with Centerra or unilaterally revoke the 2009 operating agreement. That resolution came on the back of efforts by some opposition figures to nationalize the mine.
China’s president clinched another round of multi-billion-dollar oil and gas deals in Uzbekistan on September 9 as he continued vacuuming up the region’s energy resources on his tour of Central Asia.
Xi Jinping and his Uzbek counterpart Islam Karimov signed agreements worth $15 billion in Tashkent, AFP reported.
Details were not immediately released, but the report said the deals included contracts in the oil and gas industry, where Sino-Uzbek economic cooperation has been expanding since Uzbekistan started exporting gas to China in September 2012, and also agreements in the uranium sector, which Tashkent is eager to develop.
Other deals covering trade, energy, investment and financing were also signed, a report on the People’s Daily website added. Uzbek media, which are notoriously slow to react to events, had not reported the deals by late evening on September 9; neither had the presidential or Foreign Ministry websites.
During his visit Xi called for China and Uzbekistan to boost bilateral trade, which stood at $3.4 billion last year, to $5 billion by 2017. Xi suggested opening negotiations to set up a Sino-Uzbek free trade zone, and looking at measures to promote infrastructure connectivity between the two countries, which do not share a direct border but are linked via Kazakhstan or Kyrgyzstan.
Tajikistan likes to brand itself as the last Central Asian Eldorado, a place that (once the deep-pocketed foreigners get over their corruption concerns) will be swimming in hydrocarbon and mineral wealth – or at least look something like Kazakhstan.
So far though, in its 20-plus years of independence, Tajikistan has enjoyed little foreign investment, even though it boasts over 600 documented mineral stores, including what’s believed to be one of the largest silver deposits in the world.
A new poll has found that nearly half of Tajiks would welcome foreign investment in their mining sector, while more than a fifth were against it. These figures are almost the mirror opposite of sentiments in neighboring Kyrgyzstan. Asked how they “feel about foreign companies developing mineral resources,” 45 percent of Tajiks said they were in favor, while 21 percent said they were opposed. In Kyrgyzstan, only 25 percent responded positively, with 43 percent opposed. (The poll was released on August 5 by regional pollster M-Vector, covering 1,008 respondents across Tajikistan and 2,656 in Kyrgyzstan.)
The pollsters offer no hypotheses about the difference, but why not bounce around some unscientific ideas about the possible reasons that people in two desperately poor, mountainous post-Soviet states bordering China have such different views on outsiders extracting their natural wealth for a fee?
A consortium consisting of a trio of oligarchs and the Kazakh government has moved one step closer to taking control of a London-listed natural resources giant with major operations in Kazakhstan.
The consortium bidding to win control of the Eurasian Natural Resources Corporation (ENRC) submitted a slightly revised offer to take the company back into private hands on June 24, after its initial proposal last month fell flat when minority shareholders said it undervalued the company.
However, the new offer valued the embattled company at even less: The terms were similar to last month’s proposal but the value was slightly down due to changes in dollar-sterling exchange rates and falling share prices.
The new offer proposes paying shareholders $2.65 in cash plus 0.23 of a share in London-listed copper miner Kazakhmys in exchange for each ENRC share. Kazakhmys, ENRC’s largest stakeholder with 26 percent of the company, issued a statement on June 24 saying it was accepting the offer despite believing it “may undervalue ENRC and its assets.”
Kazakhmys said it did not believe it could secure better terms, and that it would raise $887 million from the sale that could be targeted to its core business. If approved by shareholders, the deal would remove the firm from ENRC.
Protests outside the Kumtor gold mine in northern Kyrgyzstan have ended and the mine has resumed operations. But related unrest shifted south over the weekend.
Outside Jalal-Abad, Kyrgyzstan’s third-largest city, demonstrators are blocking the country’s only north-south highway, creating a traffic jam several kilometers long, local media report. Since Friday, protestors also have occupied parts of the main government building in the city.
They are demanding the release of three nationalist lawmakers serving short jail terms for stoking unrest last October amid calls to nationalize the profitable mine, which, in a good year, produces 12 percent of Kyrgyzstan’s GDP.
Jalal-Abad is the stronghold of Kamchybek Tashiev. In that October incident, he led supporters over the fence surrounding parliament, vowing to “replace this government.” A Bishkek court this March found Tashiev, Sadyr Japarov and Talant Mamytov – all lawmakers with the Ata-Jurt party, which draws its support largely from the south – guilty of trying to overthrow the government. The sentences were seen as light, but deprived the three of their parliamentary seats. Tashiev, who announced a hunger strike today, is due to be released this autumn.
Authorities in Kyrgyzstan have declared a state of emergency and curfew after police clashed with protestors who have forced the country’s largest enterprise, the Kumtor gold mine, to shut down.
Since Tuesday, hundreds of protestors have blocked the road to the high-altitude mine (or thousands, depending on the source). They are demanding Kumtor pay for new schools, hospitals and roads in the region, and calling on the government to tear up the existing operating agreement. On May 30, protestors seized an electrical substation and cut power to the mine.
Officials said 92 people had been arrested and 55 wounded, including security forces, in the May 31 clashes around Barskoon on the southern shore of Lake Issyk-Kul. Police used stun grenades and rubber bullets, according to Kloop.kg. Some local news sites reported that protestors took the head of the district hostage, later exchanging him for detained protestors.
In an open letter to the prime minister, Kumtor outlined how it has fulfilled many of the protestors’ demands through the tens of millions of dollars it pays into a development fund for Issyk-Kul province and other contributions.