Gold Mining in Kyrgyzstan
Exploration for gold in Kyrgyzstan has taken place since before the Second World War and there is an extensive archive of Russian standard data. Mining in general accounts for some 25% of GDP, with a significant proportion of this contributed by the Kumtor mine in the East of the country.
Kumtor is located on the Tien-Shan gold belt, which extends through the South of the country and into Uzbekistan, where the Muruntau mine, the world’s largest producer in 2014 with 2.4m oz, is located.
The Kumtor gold mine is the largest open pit gold mine in Central Asia, operated by the Canadian company Centerra Gold Inc., which holds its interest in the Kumtor mine through the Kumtor Gold Company (KGC). The government of Kyrgyzstan holds 33% of shares of the company. Some 7,289 and 8,640 tons of ore were mined in 2013 and 2014, respectively, producing 18.7 and 17.5 tons of gold. The Kumtor gold mine has been a major benefit for the Kyrgyz economy. According to the National Statistics Committee, in 2014 Kumtor contributed 7.4% of total GDP. Kumtor has been responsible for over $2.7bn of foreign investment in the country since 1994. The company employs over 2500 people, most of whom are Kyrgyz citizens.
The second largest gold mine, Makmal, is operated by the OJS Company KyrgyzAltyn. The company is solely owned by the government of Kyrgyzstan. Production at the Makmal gold mine totalled 21.5 tons of gold in the period of 1986- 1996 but reserves are now largely exhausted and operations are winding down.
The government’s “National Sustainable Development Strategy for the Kyrgyz Republic for 2013-2017” calls for over $300 million to be invested in gold projects. Gold mines under development include Ishtamberdy, Solton-Sary, Terek and Terekkan. Development of the Taldy- Bulak Levoberezhny and Bozymchak gold deposits started in 2015.
The Kyrgyz government is also taking steps to introduce greater transparency and fairness into its dealings with the mining sector. A government reform program was launched in 2015 and in June of 2016 the newly appointed Prime Minister implemented structural changes aimed at:
(i) ensuring the transparency of public administration
(ii) the dynamic development of the economy
(iii) increasing exports
(iv) increasing private and public investments
In July 2016 the entire Natural Resource Ministry and associated bureaucratic organisations were overhauled and restructured under a new single State Committee on Industry, Energy and Subsoil. The Government has also received significant international support in developing its programme to promote market based economic reforms, including:
- a $100 million facility provided by the IMF to support structural reforms
- a $24 million World bank programme to promote improvements in public sector governance and private sector competitiveness
- EUR 15 million ear marked by the EU for a comprehensive economic and political reform program as well as providing technical support.