Kyrgyzstan's gilded economy
The state agency of geology and mineral resources of Kyrgyzstan announced this week that in 2011, the output of the gold-mining industry of the ex-Soviet republic increased by 41.7% compared with 2010.
The value of gold production was $1.9 billion, almost a full 15% of the impoverished country's $13.16 billion (2011 est.) gross domestic product.
Overall production of non-ferrous metals grew by 23% but equalled a miniscule $22 million.
Kyrgyzstan is in 10th place in the world concerning precious metal sales. Every year, the country extracts 17 tonnes of gold and 4 tonnes of silver according to official figures.
The gold mining industry in the country is dominated by the massive Kumtor gold mine, controlled by Canada’s Centerra’s and the Kyrgyzs government.
In operation since 1997 Kumtor last year represented over 10% of Kyrgyzstan’s GDP and 54% of its industrial output. Kyrgyzstan holds 33% of the mine and Canada’s Centerra the remainder.
In December access to the mine was blocked for a week by community protesters seeking greater involvement in the mine, but production was only marginally effected. Centerra announced earlier in January that its 2011 consolidated gold production totalled 642,380 ounces, which includes 583,156 ounces from Kumtor.
The Canadian company forecast 2012 consolidated gold production to be range from 635,000 to 685,000 ounces, with as much as 625,000 coming from Kumtor. Margins at the mine are fat: cash costs in 2012 are forecast to be $430 – $465/oz. Kumtor’s reserves has been pegged at 6.3 million oz.
Last week Eurasianet reported as a matter of routine the Kumtor operating company ignores environmental legislation and makes it impossible for independent auditors to do inspections giving rise to severe warnings about the mine's impact on Central Asian water resources.
The ex-Soviet republic of 5.5 million people with per capita GDP of only $880 has been plagued by ethnic strife since independence and the October 2011 presidential election when business tycoon Almazbek Atambayev was elected was the country’s first peaceful transfer of power.