The report, “Tarnished Gold: mining and the unmet promise of development,” summarizes the major concerns of civil society with the Kumtor gold mine:
Tarnished Gold: Mining and the unmet promise of development (Acrobat pdf, 372 KB)
“The Kumtor gold mine in Kyrgyztan has received $40 million in loans and equity investments from IFC. However, the mine has been riddled with problems. In May 1998, the release of nearly two tons of cyanide and sodium hypochloride, poisoned the Barskoon River, leaving several people dead and hundreds seeking medical treatment. In July 1998, 70 liters of nitric acid were spilt, and in January 2000, a mine truck dumped 1.65 tons of ammonium nitrate. In July 2002, a Kyrgyz worker was buried in the collapse of a 200 meter high pit wall at the mine. In 2004, the IFC sold its holdings in Kumtor, earning a profit that brought its cumulative capital gains on this project to nearly $40 million and distancing itself from liability for the social and environmental harms experienced in the project area.”
The mine’s accidents sparked demands for its independent, third party environmental and safety audit, but the company has repeatedly denied civil society organizations access to the site to conduct such an audit.
Furthermore, following the March 2005 revolution, public protests broke out against the 1998 cyanide spill. Cameco had paid the Kyrgyz government compensation for the accident, but corruption has limited aid to polluted areas.
Despite both the 1998 spill and a 2006 accident when the mine’s walls caved in, EBRD has decided to finance Centerra’s mining operations once again with a $50 million loan to the company for its work in Mongolia and the Kyrgyz Republic. The project was given only a C/1 environmental rating.
General lack of transparency and disclosure on the company’s side combined with government corruption and lack of will to respond to emergencies proved this project tremendously problematic. A report by the International Monetary Fund on fiscal transparency in the Kyrgyz Republic found Centerra to be abiding by international standards but pointed to concerns with government transparency. Further disputes between the company and the Kyrgyz government in 2008 reveal the continuation of these problems, particularly in terms of corruption and transparency.