This is a best prospect industry sector for this country. Includes a market overview and trade data.
Mining in the Kyrgyz Republic remains a politically sensitive area, and all foreign investors must be fully aware of the risks involved in doing business in this sector. Still, supplying the mining industry provides opportunities for U.S. exporters. The Kyrgyz Republic is home to a plethora of minerals, including gold, iron, copper, coal, and antimony. It should be noted that since the beginning of 2020, new legislation has entered into force, banning the development of uranium and thorium deposits, as well as the import of uranium-containing raw materials.
The Kumtor gold mine is a clear example of the risks involved in the mining sector. In operation since 1996, the mine has estimated proven and probable “contained gold” reserves of 170 metric tons. For years jointly owned by a Canadian company, Centerra Gold, and the Kyrgyz government, Kumtor became the largest gold producer in the country (10-23 metric tons of gold per annum), the largest private employer and taxpayer, and contributed 12.5% of the country’s GDP. Disputes regarding alleged environmental damage were settled by both parties through agreements over the years, until mid-2021, when parliament imposed a $3 billion fine on Centerra Gold and passed legislation allowing the Kyrgyz government to impose temporary external management on any company if it believed immediate environmental or safety threats existed. As of May 2021, the mine is no longer run by Centerra Gold, and the dispute is in international arbitration.
The government has a long way to go before meeting international transparency standards in mining. The Kyrgyz Republic’s membership in the Extractives Industry Transparency Initiative (EITI) was suspended in 2017 for inadequate progress overall in implementing the 2016 EITI Standard, citing a need for improvement in terms of disclosure of information related to the extractive sector.
The State Committee on Industry, Energy and Subsoil Use, which as a result of the government restructuring in February 2021 was moved to the Ministry of Energy and Industry, maintains a website to update prospective investors about sites and bids.
- Feasibility and exploration studies: Foreign firms are commonly employed to conduct feasibility studies, as well as to further explore potential reserves.
- Mining & ore processing equipment: U.S.-manufactured machinery, particularly excavating, loading, and transportation equipment, has been utilized at the Kumtor gold mine. Such equipment could be used at other mines, following further investment and construction. Kumtor’s namesake operator procures U.S.-manufactured parts and supplies, and in the past has made significant capital expenditures on U.S.-manufactured equipment in support of mine operations.
- Development of existing and new mineral deposits: Gold, silver, tin, copper, tungsten, coal, oil, natural gas, antimony, and other minerals can be exploited with additional investment and development.