Just in case foreign investors needed another reason to be wary of Kyrgyzstan, the country’s swashbuckling parliamentarians are again picking on a promising mining venture.

Stans Energy Corporation, a Toronto-based mining startup aiming to resuscitate Kyrgyzstan’s Soviet-era heavy rare earth metals (HRE) industry, is taking legal action after parliament recommended the annulment of the company’s licensing agreement.
Prospectors and investors have fanned out across the globe to develop new rare earths supplies following a Chinese export ban in 2010. HREs are crucial components in many electronics and high-capacity batteries, and China produces over 95 percent of world supply.
All of this was fortuitous for Stans, and Kyrgyzstan, which sold the company a 20-year lease to redevelop its HRE assets in 2009. At the time, Stans owned rights to one of the world’s only previously proven sets of rare earth metals outside China. Its stock soared on Canadian exchanges when it was first floated in 2011.
But Stans’s initial agreements were won in 2009, shortly before President Kurmanbek Bakiyev’s spectacularly corrupt government collapsed. Kyrgyzstan’s current authorities view just about every agreement dating from the Bakiyev era as fair game for renegotiation, as their battles with top enterprises such as Centerra Gold, which operates the profitable Kumtor gold mine, Megacom, the country’s largest mobile operator, and AsiaUniversalBank demonstrate. 
In June, the state geological agency renewed Stans’s concession to continue working on the pit mines. Shortly thereafter, however, parliament began raising its ire at the agreement, complaining that Stans’s mines were “idle.”

Boris Aryev, Stans’s director in Kyrgyzstan, defended the company in local media. “Everything is in order. [Parliament] says that the mines are idle – this is incorrect. The site was closed for 20 years, it is impossible to redevelop all of the infrastructure and start work in a short time,” he told K-News.
Kyrgyz authorities have used “idle” assets as a pretense for nationalization in the past, and often opened up Centerra renegotiations with myriad legal accusations and threats. After the most recent round of attacks on the company (which is one-third owned by the Kyrgyz government), a report due in October will likely result in further concessions to Bishkek. 
Mining ventures often start as high-risk investments in exploration and feasibility studies, before larger companies buy out initial investors and ramp up production. Stans has no revenue, and will need to start proving to those larger players that it has a future if the project is to survive. Stans’s share price is nearing an all-time low on news of the legal action as investors take cash to competing projects elsewhere. 
In the meantime, opportunity for Kyrgyzstan may be slipping away yet again. While environmental, revenue-sharing, or local development concerns about the country’s mining projects may indeed be valid, the regularity of such attacks against foreign investors leaves Kyrgyzstan’s politicians without the benefit of the doubt.