Mining Operation Serves as Benchmark in Kyrgyz Economy

“The story of Kumtor is very much the story of the Kyrgyz Republic,” explains Michael Fischer, President of Kumtor Operating Company. Kumtor Operating Company was launched in 1992 by Cameco Corporation, which had been introduced to the Kumtor gold deposit in Kyrgyzstan while looking for uranium properties in the country. Gold production at Kumtor began in 1997 and Centerra Gold was formed in 2004 acquiring all the gold assets of Cameco. Today, Centerra Gold’s Kumtor mine in Kyrgyzstan is the biggest western-owned gold mine in Central Asia, producing around 600,000 ounces of gold per year. The mine produced a total of 260.7 tonnes of gold between 1997 and 2011.

Kyrgyzaltyn JSC, which is controlled by the Kyrgyz government, has a 33% share in the equity of Centerra Gold. The Kumtor Mine, which plays a major role in the national economy, is owned 100% by Centerra Gold. Michael Fischer explains, “In 2011, Kumtor accounted for around 25% of Kyrgyzstan’s industrial output, 12% of its GDP and 50% of its export revenues. In addition, Kumtor directly employs more than 2,700 people, 95% of whom are Kyrgyz Nationals, as well as 1,000 contractors.”

The mine is operated according to the highest international environmental and safety standards; in fact, its safety record surpasses that of most mines worldwide, including mines in North America. Michael Fischer says, “We are very proud of our environmental footprint and safety systems, and we use the most up-to-date truck fleet in the world to move over half a million tonnes of material every day.”

Production at the mine is planned until 2021, but Kumtor is committed to ensuring that the surrounding area will continue to develop sustainably even after the mine is closed. The mine’s employees are being trained in skills which will help them find good jobs anywhere in the future, and Kumtor supports a number of local corporate-social-responsibility initiatives, including donating 1% of its gross monthly revenues to the Issyk-Kul Development Fund. In 2011, Kumtor provided €10.4 million (KGS 636 million) to the fund for more than 300 projects, including ones involving local farmers. In addition, Kumtor also funds three micro-credit operations, as well as, educational projects, including a business-training initiative in partnership with the EBRD. One of Kumtor’s projects is ‘School 27’ in Bishkek, an apprenticeship program for disadvantaged young people. Also, in 2012, Kumtor signed an agreement with the Kyrgyz Government to fund €16 million (US$21 million) into a national micro-credit financing program to provide financing for small sustainable development projects throughout the Kyrgyz Republic.

Kumtor not only serves as a benchmark in Kyrgyzstan’s private sector; it also demonstrates the strong investment potential of the Kyrgyz economy. As Michael Fischer explains, “If international investors want to see what can be accomplished in this country, they should take a close look at Kumtor.”