Kyrgyzstan nationalizes gold mines operated by Canadian companies

July 9, 2021
7:14 am

Justice News Flash Report

Kyrgyzstan nationalizes gold mines operated by Canadian companies

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Kyrgyzstan Bishkek and Lake Issyk-Kul region—— In the early 1990s, it was hoped that a large gold mine in eastern Kyrgyzstan near the Chinese border would free the newly independent country’s economy from the destruction of the Soviet Union’s central plan.

But for 30 years in operation, Kumtor has become a symbol of the greatest ills in many developing countries: corruption, environmental degradation, and neocolonial greed.

In May, it was clear that dark clouds had gathered over Centerra Gold Inc. Centerra Gold Inc is a company registered in Canada that operates high-altitude mines, 26% of which belong to Kyrgyzstan.

1. The court ruled that the mine dumping environment is illegal
The mining of waste materials on the glacier resulted in the gradual erosion of the glacier and cost the state US$3 billion.

Soon after, the parliament supported a proposal of the Kumtor Special Committee to introduce state management to the mining area for three months.

Most of the Kumtor workers come from the Issyk-Kul region, which is a picturesque lake area where the mines are located [Agnieszka Pikulicka-Wilczewska/Al Jazeera]

On May 14, President Sadr Japarov approved the plan, effectively returning the mine to the state.

Subsequently, a number of well-known politicians accused of financial crimes related to Kumtor were arrested.

In response, Centerra Gold initiated a binding arbitration procedure against the government because they believed it violated the agreement between the parties.

Its Kyrgyzstan subsidiaries-Kumtor Gold Co and Kumtor Operating Co-filed for bankruptcy in a US court, and the company said it would seek compensation from the government.

“In 1994, after the people of Kyrgyzstan became independent, with your help, we started to build the Kumtor Gold Mine. The initial life span was 18 years. Until today, the things we have created together are special things, from all over the world. Engineers will come to study,” Centerra President and CEO Scott Perry wrote in a statement.

“The confiscation of mines is based on false information and baseless allegations, which undermine everything we have built together. We are worried that government improper behavior will put thousands of high-paying jobs and hundreds of Kyrgyz supplier companies at risk .”

Seen as “the source of the elite’s wealth”

After the presidential election in January, Centerra faced increasing pressure. Japarov After a campaign that promised national rejuvenation, it won a big victory.

He was appointed interim president and prime minister after the outbreak of opposition to political corruption and controversial parliamentary elections in October last year. This is the third unrest since the country’s independence.

It was gold that put him in power.

A few months before his landslide victory, he was released from prison. He was serving 11 and a half years in prison for kidnapping a local official during a protest against Kumto.

Since 2013, he has been the main figure in the movement against foreign companies, and he accused him of using Kyrgyzstan’s scarce resources.

He believes that the country’s elites are benefiting at the expense of the people and the environment.

Many locals agree with him.

Asel Doolotkeldieva, a researcher on the politics of resource extraction in the capital of Kyrgyzstan, Bishkek, told Al Jazeera: “For more than 30 years, based on the economic model of mining, the extraction of natural resources has been regarded as another source of wealth for the elite.”

“They believe that investors and elites seek to get rich together, invest resources, and leave once the resources are exhausted.

“The extractive industry only provides 3% of the country’s employment opportunities. Mines are being exploited, resources are being emptied, and the government is getting richer and richer. However, although the local communities have carried out some development and charity projects, they have not contributed to their lives. direct impact.”

At the same time, some people are worried about the damage caused by mines to the environment.

“Waste is stored on the glacier. It is estimated that after the mining of Kumtor is over, its weight will reach 1.8 billion tons. It will stay there and affect the environment. The glacier is one of the water sources of the Kumtor River. It flows into the Tarague River, and then into the Naryn River, the largest cross-border river in Central Asia, Sirdaria,” environmental protection expert Kalia Mordogieva told Al Jazeera.

“We opposed the Kumtor project from the beginning because it is located in a glacier area. In any case, glaciers will melt due to global warming, and in Kumtor, they are also affected by human factors.”

Japarov’s miner support

In February 1995, Murat was not ready for this job. When his feet first touched the Pride Mountain of Kyrgyzstan, the temperature was -45 degrees Celsius (-49 degrees Fahrenheit).

The dry freezing wind at an altitude of 4,000 meters (13,123 feet) makes it difficult to breathe.

“I have never seen anything like this before. We feel like we are on another planet,” said Murat, 59, who has worked in Kumtor for eight years. “they [company bosses] Invite us to have dinner in a hall that looks like a restaurant. Then they gave us cans of Coke. This is the first time I have seen it. “

He resigned in 2003, when he had managed to build a house in Japarov’s hometown of Lake Issyk-Kul and had supported his relatives for many years.

Murat said that working in Kumtor is very hard, but the company is a fair employer.

Overtime pay is doubled, safety is always the top priority, and he is very happy to be able to use the latest technology.

“We receive medals, clothes, and gifts every five years. They are very good to us. At the time we
Only consider ourselves, our family and money. Everyone wants to get rich. “

But over time, Murat changed his opinion. Today, he is satisfied with President Japarov’s nationalist reform agenda.

“Kyrgyzstan is not ready for this. We agreed to mine gold a bit too early. Our technology is not good enough to operate in the cold mountains. Now we deserve the Japarov. We have ended our lies.”

Murat showed pictures of him in the Kumtor era, and a nostalgic mood enveloped him.

Soon after, he took out a small book: a poem written to Japarov by his supporters while he was still in prison.

“May Sadr be released! He will get the job done! He will be punished for no reason, and if someone like him comes to power, he will sweep our country out.”