It is imperative to achieve cancellation of the LBMA decision to suspend Kyrgyzaltyn OJSC from the Good Delivery List. The head of the Mining and Metallurgical Trade Union Eldar Tadzhibaev said.
According to him, the decision of the London Bullion Market Association (LBMA) may negatively affect the entire gold mining industry of the country, and the refinery in Kara-Balta may go bankrupt, since it will become unprofitable to refine gold at this enterprise.
«There are about 70 refineries in the world supplying gold bars to the London Bullion Market Association. They are also in the neighboring countries — Russia, China, Uzbekistan and Kazakhstan. There are three of them in Kazakhstan — Tau-Ken Altyn, Kazzinc and Kazakhmys plants. Our companies can refine their gold at these plants, but the legislation needs to be changed, since the rates of duties for the export of precious metals are high and it is unprofitable,» Eldar Tadzhibaev said.
According to him, Kumtor currently has several options for overcoming the current situation. It is also possible to process gold from the mine at the refinery, selling it further at discounted prices. Gold can be also melted at other Good Delivery plants, or maximum measures to cancel the decision of the London Bullion Market Association should be taken to return the status.
«In any case, KGK will have to sell gold, since significant financial resources are needed to ensure continuous production activities and timely payment of wages. Deficit of the republican budget should not be also allowed. Earlier, the National Bank of the Kyrgyz Republic bought gold, but it is highly questionable whether it has enough funds for these purposes, and at what price it will be able to buy it,» the head of the Trade Union said.
Regarding the New York court’s decision on the supply of spare parts for large Caterpillar dump trucks, Eldar Tadzhibaev is confident that this problem can be solved. There are intermediary companies supplying mining equipment and machinery that will promptly supply the necessary spare parts. The cost will be higher, but this is a way out.
We offered Kumtor management our assistance in the supply of spare parts through international organizations, of which our trade union is a member.Eldar Tadzhibaev
At the same time, he noted that the Cabinet of Ministers should take all necessary measures as soon as possible to cancel the LBMA decision on suspension of Kyrgyzaltyn OJSC from the Good Delivery List. After all, the deprivation of this status is not only economic losses, but also a serious blow to the image and authority of Kyrgyzstan, which can lead to an outflow of investors. Eldar Tadzhibaev is sure that the parliamentary committee on the fuel and energy complex and subsoil use should consider this issue at its meeting, find out the reasons for the current situation and find the ways out of it.
«Issues related to the activities of mining companies should be considered exclusively from the economic and legal plane. Politicization of the activities of the budget-forming sector is destructive for it,» Eldar Tadzhibaev said.