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Delivering Community Power CUPW 2022-2023

Is the fight for the Kumtor gold mine drawing to a close?

Earlier this year, the Kyrgyz state nationalized the Centerra-owned mine, leading to a bitter legal battle that hasn’t waned

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The Kumtor mine in northern Kyrgyzstan, run by the Canadian Centerra Gold company since 1997, is one of the largest gold mines in Central Asia. Photo by Silvia Sorana.

On December 11, the Chairman of the Cabinet of Ministers of Kyrgyzstan, Akylbek Japarov, revealed that he hopes to conclude negotiations with Canadian mining company Centerra Gold by the end of 2021. Earlier this year, the Kyrgyz state nationalized the Centerra-owned Kumtor gold mine, leading to a bitter legal battle that has not waned in recent months. In September, for example, Centerra sued Kyrgyzstan in a US court in an attempt to apply penalties of $1 million per day to the state, but their lawsuit was shut down. The Kyrgyz victory was short-lived: that same month, Kyrgyzstan was blocked from selling gold bars in London, the international hub of gold trading. Overall, gold production at Kumtor has fallen 27 percent as a result of the instability of the transition period.

Last week, Kyrgyzstan filed a lawsuit of its own against Centerra. On December 15, the government announced that it has “launched legal proceedings against Canada’s Centerra Gold over cyber-security and employee rights violations at Kumtor Gold Mine.” The lawsuit alleges that the company blocked user and administrator access to the mine’s computer system shortly before the nationalization was approved in May 2021. In response, Centerra accused Kyrgyzstan of sending “secret police” to “seize” the Kumtor gold mine.

Journalists often describe Kyrgyzstan as “Central Asia’s only democracy.” However, in contrast to the seemingly perdurable post-Soviet states of Kazakhstan, Uzbekistan, and Turkmenistan, Kyrgyzstan’s governmental system often appears to be in a constant state of flux. Over the past 15 years, the country has seen five presidents and 15 prime ministers come and go. Some were toppled by popular uprisings, all of which failed to break definitively with the economic policies of the past. The most recent administration to emerge from a popular uprising is that of Sadyr Japarov (no relation to Akylbek), a national conservative and economic liberal. Observers often marvel over the fact that, within a few years, Japarov went from “a prison cell to the presidency,” and a seemingly popular presidency at that: in January 2021, he was elected with 79 percent of the vote. For many Kyrgyz nationalists, the reasons behind Japarov’s arrest likely deepen rather than reduce his support.

In the early 2010s, Japarov was an active campaigner for the nationalization of Kumtor, which accounts for roughly 45 percent of Kyrgyzstan’s industrial output. The mine has been at the centre of Kyrgyz politics for years. In addition to being owned by Toronto-based Centerra Gold, environmental catastrophes like the massive cyanide spill at the village of Barksoon and allegations of corruption between Centerra officials and government figures gradually eroded public trust in the mine’s management. As a result, the nationalization of Kumtor is one of the most popular political positions in Kyrgyzstan, supported by everyone from national conservatives to KYRGSOC, one of the largest Kyrgyz socialist organizations.

During protests against Centerra in June 2013, protestors took Emilbek Kaptagaev, a governor of the Issyk-Kul region, hostage. Japarov was found guilty of his kidnapping and sentenced to 11 and a half years in prison, but he fled the country to avoid imprisonment. When he tried to return in 2017, he was arrested. After being released during October 2020 protests against poor pandemic management and allegations of parliamentary vote-buying (during protests, Centerra’s office in Bishkek was also besieged), Japarov and his supporters organized to run in the next presidential vote. In an election with 40 percent turnout, they took almost 80 percent of the vote.

Sadyr Japarov has served as the president of Kyrgyzstan since January 28, 2021.

Several months after his inauguration, the parliament approved Japarov’s proposal to temporarily establish state control over Kumtor. Centerra responded with a series of lawsuits while Canadian government officials promised “far-reaching consequences” if the nationalization was not reversed. Meanwhile, the Kyrgyz state accused numerous Centerra employees of corruption, including the theft of $200 million in 2013, and added four high-ranking company officials to its wanted list.

Kyrgyz investigators have also called a number of former heads of state to testify as to their role in the allegedly corrupt management of Kumtor. In September, former Prime Minister Djoomart Otorbaev (2014-2015) was detained by state security forces on the suspicion that he gave Centerra approval to dump industrial waste on glaciers near the mine in contravention of the Water Code of Kyrgyzstan, “which prohibits any activity that could affect the natural state of glaciers or quality of water contained therein.” Centerra responded by saying that the Water Code does not apply to Kumtor.

While many praise Japarov’s nationalization of Kumtor, others suggest that he is only implementing the popular policy to increase his personal power. In November, for example, Japarov put forward a constitutional referendum that reduced the size of parliament by 25 percent and allowed the president to appoint judges and heads of law enforcement agencies. Seventy-nine percent of voters approved the constitutional changes. Turnout was 35 percent. While the president has claimed that changes are needed if he is expected to “establish order” in the politically turbulent country, critics of the reforms argue that Japarov has created an anti-democratic “Khanstitution” that mostly serves to increase his personal influence.

This month, Akylbek Japarov said that “Kumtor is the pain of Kyrgyzstan, its lost opportunities, its stolen wealth.” He stated that Kyrgyzstan is “ahead of the rest of the planet” when it comes to political instability, but “what lies at the heart of these conflicts, what is the root cause of these endless revolutions… is Kumtor.” He then asserted that President Japarov is finally putting an end to this state of affairs.

It would be naïve to see Japarov as an opponent of imperialism who is crusading for popular democracy on principle. He is a shrewd politician and, as described by Jacobin contributor Liam Meisner, he “does what all good neoliberals do and promotes private ownership as the solution to state corruption and mismanagement, rather than genuinely reforming the public realm.” He is not offering anything like a holistic solution for a country afflicted by widespread poverty and striking inequality between the rural and urban areas, and in most ways his economic policies resemble those of his predecessors. In short, his nationalization of Kumtor is an anomaly rather than an affirmation of his anti-imperialist credentials.

Nevertheless, the nationalization has made Japarov powerful enemies within Centerra and the Canadian government, which continue their legal attacks on Kyrgyzstan while Japarov increases his presidential powers. As the optimistic January 2022 deadline approaches, there is little indication the hostility that has characterized the Kumtor negotiations will subside in the coming weeks.

Owen Schalk is a writer based in Winnipeg. His areas of interest include post-colonialism and the human impact of the global neoliberal economy. Visit his website at www.owenschalk.com.

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