Kyrgyz mine's consequences include dangerous conditions and multiple toxic spills
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Location |
Kyrgyz Republic
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Funding |
$40 million EBRD & IFC each, $45million from MIGA
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Status |
Completed, mine active
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Located in the remote Tien Shan mountain range in the northeast of the country, the Kumtor gold mine is owned and operated by the Kumtor Gold Company, a subsidiary of Centerra Gold, which in 2004 took over the gold side of the world’s largest uranium miner, Cameco Corporation, now with a 53% stake in Centerra Gold.
Construction of the mine began in 1994. The European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC) extended loans and the Multilateral Investment Guarantee Agency (MIGA) provided a loan guarantee for the project in 1995. The IFC and EBRD each invested $40 million, and MIGA guaranteed $45 million in the massive project, which has accounted for 18% of Kyrgyzstan’s GDP.
The project, while bringing impressive returns, has had devastating impacts on the region. As part of a study done by BIC, civil society organizations have challenged the IFC to prove the claims that such projects serve to help alleviate poverty. The report
Tarnished Gold: Mining and the unmet promise of development (Acrobat pdf, 372 KB)
describes how toxic materials were spilled and dumped in the region leaving several dead, and many others in need of medical attention. Though the EBRD committed to a two year conservation program in 2005 with aims of protecting the Sary-Chat Ertash Zapovedik nature reserve and wildlife such as the snow leopard and the rare Marco Polo sheep, there are many unresolved critical problems surrounding the project, for people and animals alike.
In April 2008, EBRD disclosed a second project dealing with Kumtor mine. This regional project provides a $50 million loan to Centerra Gold for its operations in both the Kyrgyz Republic and Mongolia.