Kyrgyzstan happens to be home to the world’s second largest gold mine in the world. This is a country that most people have never been and know very little about. The truth is, this is one of the most mineral-rich areas on Earth.
This is not a very safe country, particularly four outside travelers. A prospectors who is considering venturing to the country in search of gold should take all proper precautions. There are many dangers.
Most of the gold being mined in this country is done by large companies that can afford to have private security to maintain a safe worksite. The average person should most certainly take this into consideration before considering a trip into the remote parts of Kyrgyzstan. You have been warned.
Gold Mining Regions of Kyrgyzstan
The majority of the gold production in Kyrgyzstan currently happens at four major sites:
With such high deposits of gold, you would expect this country to be massively rich and among one of the leading countries in the world in terms of development, after all, isn’t money power?
Despite having known about the huge mineral deposits early on, active mining did not take place here until after independence. This is when foreign investors began showing an interest in the country. Major mining firms based around the world have set their sights on Kyrgyzstan, and the mining future is bright.
The 2nd Largest Gold Reserves on Earth
First, let us discuss the Kumtor Gold Mine which happens to be the world’s second largest gold mine in terms of the amount of gold reserves it is estimated to have. The mines were discovered back in 1978 but became operational in 1992 after Kyrgyzstan got its independence.
The local government really needed foreign investors to provide them with the financial assistance they required since the operation required considerable investment to begin operations. The Kumtor Gold Mines are currently owned by Conterra Gold company with its headquarters at Toronto, Canada.
The main method of extraction used here is the open pit or surface mining technique. Open pit mining involves extracting minerals or rocks directly from the earth by first digging deep and open pits. Simply put it’s a drill, blast, shovel, load and truck operation. This is how most of the major gold mines around the world are being worked now.
Despite being cheaper than other methods of extraction, it is not without its flaws. Pit mining deals a lot of damage to the nearby surroundings. Active operations can cause air-borne diseases to the local communities. As with any form of mineral extraction, there are always positive and negatives.
Other Large Gold Mines
The other major gold mine not only in Kyrgyzstan but also among the largest in the world is the Makmal Gold Mine located in the Toguz-Toro District. Just to give some history on this mine, it was once the largest gold mine in the Soviet Union. It is currently owned and run by the Makmal Gold mining company. These reserves produce over a whopping 1.2 million tons of gold per year!
Third in line is the Talas Gold Mines which are also found in Kyrgyzstan in the northwest part of the county in the Talas province. Once again, this happens to be among the largest gold mines in Kyrgyzstan and the world. It is currently owned and run by Goldfields, with its headquarters at Johannesburg, South Africa. The mine’s reserves are estimated to house around 3.7 million pounds of gold!
Closing up the big-four list is the Unkurtash Gold Mine found in the western part of Kyrgyzstan more specifically in the Jalal-Abad Province. Though not fully exploited, its reserves are estimated to house about 3 million pounds of gold. The mines are currently run by Goldfields of South Africa. This company was ranked 7th place among the world’s leading producers and suppliers of gold, and is a major player in the world mining.
Gold: A Considerable Part of Kyrgyzstan’s Economy
With all these valuable resources and possibly more untapped ones, why isn’t Kyrgyzstan among the leading countries in the world? Since 1997 when the country fully took its position as one of the world’s leading gold producers, more than 270 tonnes of gold have been extracted and sold from open-pit mines. Gold currently makes about 12% of Kyrgyzstan’s GDP and 50% of its exports. As of right now, the revenue earned from gold mining caters for 10% of the national budget.
But looking at Kyrgyzstan’s potential when it comes to gold mining, all this is just but a tip of the iceberg, when properly exploited the country should be making staggering amounts of money as revenue. But why isn’t this the case?
Despite it being difficult to transport the gold from the mining fields, the major problems lay with the high political interference that scares away foreign investors. To state it simply, many companies are scared away from the challenges that mining in Kyrgyzstan presents. When compared to mining in much more stable countries, it is no surprise that many have avoided this relatively young country.
More Growth in the Mining Sector
Currently, there are undergoing renegotiations between the leading gold mining company, Centerra Gold and the national government. The national government claims that it is the minority shareholder despite the mineral being in their country. The company currently pays 14% of its gross revenues and taxes with the additional annual environmental fee. The government is, however, claiming 20% of the company’s gross revenue.
So far, Centerra Gold Company has been fined over $500 million from environment damage. It is such political issues that turns off foreign investors who would help in not only in extracting minerals but also add to Kyrgyzstan’s revenue.
With that said, the countries and the people who live there often get the “short end of the stick” when it comes to these major operations. People are getting rich from the golden resources of this young country, but will that money make it past the mine owners and the politicians?
Next: Huge Gold Mines in Brazil’s Amazon Jungle