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Kyrgyzstan changes rules of work in mining sector

The President of Kyrgyzstan Sadyr Japarov signed a decree on reforming the mining industry in the republic yesterday. The document provides for a number of changes in the process of the sector’s work.

The document was reportedly adopted to increase productivity of the mining industry, create a transparent system of legal regulation, and fulfill its potential. In addition, through the changes, it is planned to ensure safety of the population and minimize the burden on the environment, as well as create a favorable investment climate and expand opportunities for further economic growth in Kyrgyzstan.

The President recommended the Government to develop and submit a draft Mining Code to the Parliament for consideration by July 1, 2021.

This document should be aimed at creating an integral system of legislation in the field of subsoil use. In particular, it will provide for development of subsoil plots of national importance exclusively by a national mining company with 100 percent state participation in its authorized capital. An exception is made for enterprises that have a license and are developing subsoil plots of national importance at the time of the adoption of the Mining Code.

In addition, a state share will be envisaged in the development of mineral deposits that are not included in the register of subsoil plots of national importance, and the conditions for acquiring a state share will be spelled out.

Sadyr Japarov instructed the Government to step up control over illegal mining, including licensing control, ensure rational use of mineral resources, industrial and environmental safety and consider the possibility of introduction of international environmental safety standards.

The Cabinet of Ministers is also to conduct an audit of geological information to detect economically promising deposits, as well as expand the register of subsoil areas of national importance. It will be necessary to stimulate geological exploration and discover new fields with formation of a base for them for further long-term growth. The Government should consider introduction of an international system of reporting standards for mineral reserves.

At the same time, a rule will be established that when developing minerals, at least 90 percent of employees must be citizens of Kyrgyzstan. Moreover, this requirement will apply not only to the staff of the mining company itself, but also to contractors.

Mining companies will have to purchase at least 80 percent of goods and services in Kyrgyzstan.

The exception will be cases when such goods or services are not produced in the country.

The Cabinet of Ministers should work on ensuring the rationality, efficiency and transparency of the distribution of funds from mining companies to funds, republican and local budgets through digital platforms.

Mechanisms of electronic licensing of the right to use subsoil and foreign economic activity carried out by subsoil users will be developed and implemented by September 1, 2021 to eliminate corruption risks.

Exchange of data will be ensured via Tunduk interdepartmental electronic interaction system for digitalization of issuance of permits and other documents procedure in the field of subsoil use until May 1, 2021.