Parliament vs. Kumtor: summer break before new round?

The second story from our best Online Journalism School students. Join now! Natalia Lee Seems like that on August 1 there will be again raising the question of prolongation of exploitation work on the first-rate gold mine in Kyrgyzstan. The Parliament took a recess and leave open the Kumtor question. Kumtor’s already been one step away from stopping all work in this June. For the first time in 17 years the government delayed approving of the plan of open-cast mining work. The Geology Agency issued temporary permission only when the company published official statement: “Unfortunately, this year, despite repeated submissions…

The second story from our best Online Journalism School students. Join now!

Natalia Lee

Seems like that on August 1 there will be again raising the question of prolongation of exploitation work on the first-rate gold mine in Kyrgyzstan. The Parliament took a recess and leave open the Kumtor question.

Kumtor’s already been one step away from stopping all work in this June. For the first time in 17 years the government delayed approving of the plan of open-cast mining work. The Geology Agency issued temporary permission only when the company published official statement: “Unfortunately, this year, despite repeated submissions and discussions with senior officials, such approvals and permits have not been provided. The continuing absence of such approval and permits creates significant uncertainty and risks for Centerra and its employees. [...] The shutdown plan provides for the shutdown of all mine and mill operations on the close of business June 13, 2014.”

Parliamentarians, officials and experts have been discussing Kumtor question not for the first year. And even despite memorandum of Kyrgyz-Canadian joint venture establishment controversies still don’t quiet down. Many experts suppose that it’s not so much matter of economics as political motives. “I think it concern with politics. To say that we struggle against Kumtor for people use is very easy way to get political points, ” – says Iskender Sharsheev, business analyst and political scientist.

The subject of glaciers protection has been actively discussing in Parliament for the last months. Erkingul Imankojoeva, the deputy of SDPK fraction, even initiate appropriate bill. The document provides for making glaciers list, their monitoring and restriction for industry. In particular, a ban on exploitation near glaciers. Currently, there is just one working deposit that within provision of the law. It’s Kumtor. However Togolok mine in Issyk-Kul region and Djerui, the second biggest deposit in gold supply, are in glacier area too.

“Taking into account that mining industry provide about 10% of GDP, near 50% of industrial output that is half of exporting and about one third of tax proceeds it’s reasonable that the ban on work of mining companies leads to huge problems and loss of essential sum out of the budget,”- says Eldar Tadjibaev, the Head of Mining and Smelting Guild of KR.

Nevertheless, Parliament passed the law in three readings without much discussions. Deputies claimed for intention to circumvent the President veto, although the Head of State Almazbek Atambaev sent the document for revision. This ambiguous situation and actively discussed ecology and glacier issues were one of the reasons that government still doesn’t approve the plan of open-cast mining work for Kumtor once and for all.

The amendment to the water code that government proposed this June could be the solution. According to this amendment strategic enterprises that contribute significantly to the economy can search, explore and exploit deposits in glacier area.

However the document provoked parliamentarians’ negative reaction. During bill consideration in Ata-Meken fraction the deputy Joomart Saparbaev said: “Why do you want to amend such a big law? Only to protect one company interests?”

But the Agriculture Minister Taalaibek Aidaraliev countered: “Proposed changes concern not only Kumtor. Many of our objects are situated at a height of 1000 meters and more. Their work concerned with glaciers. About 16 companies work near glaciers.”

Nevertheless, Minister’s words don’t affect to deputies and amendment discussions turn into slogan of gold deposit nationalization. “If necessary we can take away everything from them. It calls nationalization. If necessary we will impose debts on them and take everything away,” – said Omurbek Tekebaev, the leader of Ata-Meken, during fraction session.

It’s not the first time when Tekebaev proposes to nationalize Kumtor. According to Ata-Meken leader, in this case Kyrgystan will be not in danger, although experts assert that such policy can turn into suit of many billions.

“It’s more political reason. Probably it concerned election project of Ata-Meken. There will be parliament election in a year, you know. So all parties have already started agitational work to make people vote for them. That’s why Tekebev doesn’t forget his half-year ago slogan of nationalization supposedly to save ecology,” – says Marat Kazakpaev, political scientist.

Political reason or not but in the upshot Parliament sent the bill of water code amendment to revision and won’t return to this question until autumn. And the debate hardly will be easy and quickly. Meanwhile, temporary permission that Geology Agency gave is valid only till August 1. Ecology departments  of Kyrgyzstan have to come to agreement with company about Davydov glacier discharge plan.

This glacier moves to site at a speed of about 1 meter per day. Now company permanently takes away glacial masses. But there is risk that glacier will flush open-cast mine if work stops. In this case it can be absolutely non-profitable again to clear away.

There is less than month of temporary permission termination but there is no any progress in this case. And seems like long, drawn-out Kumtor dispute that became the object of political games irritates even the President of the country: “Nobody want to take responsibility. There are obscure games. Political populism! But if the only one working enterprise stops tomorrow it will be disaster!” – said Almazbek Atambaev.

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