Cooperation between Kyrgyzstan and China has been currently growing at an accelerated pace. Agreements have been concluded for the construction of power plants and coal mining.
But Chinese companies are also actively interested in gold mining.
China intends to invest in Kyrgyz gold, silver and other minerals. An analysis by 24.kg news agency shows that a large number of Chinese companies are already operating in the country. They are concentrated mainly in the south, closer to Irkeshtam border checkpoint.
Chinese investments in Chatkal
There is a register of subsoil use licenses on the website of the Ministry of Natural Resources, Ecology and Technical Supervision of Kyrgyzstan. It also lists enterprises that have the right to develop or explore gold deposits.
We have studied the data and found 28 companies that are in one way or another connected with Chinese investments.
There are firms or citizens of the PRC among the founders or managers of these structures. It turned out that the vast majority of them work in Jalal-Abad region — 18 out of 28.
The analysis shows that 24 enterprises from China operate in the south of the country. There are only three in Chui region. All of them are in Kemin district.
Several facts speak of China’s plans to increase its presence in the gold mining sector of Kyrgyzstan. Zijin Mining Corporation (which owns a 60 percent stake in Altynken) is actively negotiating with the Ministry of Economy and Commerce of the Kyrgyz Republic.
In July 2023, Wang Chun, vice president of the corporation, and Yang Fuxin, financial director of the International Department, visited Kyrgyzstan.
General Director of the Chinese-Kyrgyz Altynken Wang Yafen discussed the development of cooperation in the mining industry with the Deputy Minister of Economy and Commerce Kanatbek Abdrakhmanov. Representatives of the Chinese company stress the economic benefits for Kyrgyzstan from mining of minerals and precious metals.
In 2022, Altynken (40 percent of its shares belong to the Kyrgyz Republic) produced about 40 tons of gold. As a result, Kyrgyzstan received dividends of 16 billion soms.
Scandals, ecology, problems
Besides benefits, there are risks. They concern both work at large deposits and small ones.
In 2019, Kichi Chaarat CJSC (part of China National Gold Group Corporation) launched a gold extraction plant at Kuru-Tegerek deposit. More than $150 million was invested in the construction and creation of production infrastructure. In the same year, the Prosecutor General’s Office of the Kyrgyz Republic initiated a criminal case on the facts of illegal extension of the company’s license and illegal gold mining.
Local residents opposed the Chinese enterprise, accusing the authorities of misusing funds allocated to the local budget.
Now the company continues to operate, but it is difficult to understand how transparent its work is.
An important point to consider is the environmental impact of gold mining. Mining technologies used by the PRC often raise concerns about their environmental friendliness. For example, in 2018-2019, geological exploration work at Shambesai mine was carried out by the Chinese company Tiandi. Local residents protested against the operation of the mine, demanding its closure due to harmful emissions into the atmosphere and the deterioration of the environmental situation in the region.
The situation with Makmal mine is similar. In 2018, residents of Toguz-Toro district set fire to a gold extraction plant under construction at Makmal. Participants of the protest demanded that the Chinese enterprise GL Makmal Developing stop operating due to environmental damage to the region.
The damage caused by the riots amounted to $2.3 million. The company’s operations were suspended. Makmal Gold Company received in July 2021 a permit for secondary processing of the tailing dump No. 1 and rock dumps formed during the development of the mine.
In 2020, mining companies in Jalal-Abad region caused damage to the ecology of Kyrgyzstan while working on mineral deposits.
After the end of the development of deposits, the companies did not carry out restoration measures (reclamation) of land. Violations were revealed after inspections in Chatkal, Ala-Buka and Aksy districts, the very districts where most companies with Chinese capital are located.
These facts alone suggest that the story is cyclical and protests can happen again at the snap of a finger.
How to avoid problems
The authorities of the republic are now trying to restore order in the sphere of subsoil licensing. This includes gold mining. New licenses are not issued, but all Chinese companies have valid licenses for gold deposits.
«The issue is that any company, when obtaining a license to develop a deposit, must first pass all examinations, including technical safety, environmental protection and subsoil protection checks. All these norms must be clearly observed,» Duishenbek Kamchybekov, president of the board of the Association of Miners and Geologists, told 24.kg news agency.
According to him, controlling bodies should make sure that all these norms are strictly observed. It is necessary to exclude moments when companies reach agreements with inspectors and violate environmental norms.
