The Kumtor Gold Mine is an open-pit gold mining site in the Issyk Kul oblast, about 350 km (220 miles) southeast of the capital Bishkek and 80 km (50 mi) south of Lake Issyk-Kul, near the border with China.  It is said to be the seventh-largest gold deposit in the world and the world’s second highest gold deposit, (after the Yanacocha gold mine in Peru), situated at an altitude of 4000m in a permafrost zone in the Tien Shan Mountains.

Although gold excavations were carried out in the region as long ago as in the 1920′s, the deposit was actually discovered only in 1978 – but not developed in the Soviet period.  Shortly after independence a company executive of Cameco Gold Corporation visited Kyrgyzstan and negotiated a arrangement to exploit the deposit.  (Cameco later became Canterra Gold Inc. and is a Canadian company with mining projects in Mongolia and the USA as well as in Kyrgyzstan.)  As a result of the negotiations, the Kumtor Operating Company was established in 1992, responsible for financing (worth over USD450 million), production and sales of gold from the site.

The construction of the mine began in 1994 and it was completed in record time, commencing extraction in 1997 – and about 200 tonnes of ore were produced in the first ten years of operation.  The gold reserves in the deposit are estimated to be about 716 tonnes.  Once the current deposit is exhausted, then nearby deposits may be exploited and exploration licences have been issued so that the company can investigate the viability of mining them.

The company employees over two and a half thousand people (about 95% of them from the local population) and it represents, not only the country’s largest foreign investment, but also one of its largest employers and largest taxpayers.  It contributed considerably to the fledgling Kyrgyz economy and helped to sustain it in the difficult times following independence, (despite facing a number of setbacks such as a cyanide spill, and a wall collapse).  Indeed, gold was so important for the economy of the Kyrgyz Republic, that for the period immediately after independence it represented virtually all the foreign currency earnings of the new country, and some economic statistics were (and still are) quoted in two forms – for example: GDP and “GDP (without Kumtor)”.  Kumtor also contributes to a number of local “good causes”.

It has not, however, been without controversy.

• The mine was linked to a major environmental incident in 1998 when a truck carrying 1762 kg of sodium cyanide (a chemical used to dissolve gold from granulated ore the use of which is highly controversial) fell into the Barskoon River on the way to Kumtor.  Despite official claims that there was no risk to human life as a result of the spill, (including, by way of demonstration, the deputy minister going for a swim in the river), that tourist season in the nearby Issyk Kul reort zone was seriously affected; considerable sums of money were committed to compensation – although there were subsequent claims by the local population that the money never reached the intended beneficiaries and protests led to further payouts;
• there have been claims that the operation of the mine pollutes the environment in other ways as well.  A book by the late Kyrgyz author Chinghiz Aitmatov, linked gold exploration with the melting of the high mountain glaciers and climate change;
• a wall collapse claimed the lives of several miners and led to claims that the company was operating unsafe practices – which, of course, it denies;
• many of the provisions of the agreement signed by the then President, Askar Akaev, and the company when it was established have been the subject of disagreements – especially following the Tulip Revolution of 2005 -
  • because the agreement was not ratified by the Parliament, (the Jogorku Kenesh), it is argued that uit is not valid – especially in terms of the tax concessions it gave to the company – leading to
    • calls for it to be rescinded,  or at least renegotiated – which have, in turn, led to restructuring the company and the relationship between it and the Kyrgyz parties;
    • a number of tax disputes and demands that the company pay considerable sums in terms of “unpaid taxes”.

More details can be found on the company’s webpage: http://www.centerra.ca/

Evidence of ancient gold mines has been found throughout the country – in Talas, Osh, Chui, Naryn and Issyk Kul and jewellery dating back to the 1st and 2nd centuries BC has been found in Chatkal.

Gold is found in many deposits around the country. In his book, “Gold of the Tien Shan Mountains”, by D. I. Sarygulov (who was the President of KyrgyzAltyn), cites some 25 deposits suitable for mining, and 61 “placer” deposits suitable for panning throughout the country.  Although Kyrgyzstan has one of the largest proven gold reserves in the world, fuel and spare parts shortages combined with political disputes to hamper output.  In fact, at the moment, only two mines are producing gold: Makmal and Kumtor.

Mining was, in fact, a well established industry in the Soviet Union, especially in the period during and after the Second World War, (Sarygulov’s book contains a particularly damning account of the shortfalls of the Soviet mining industry).  The Soviet Union’s largest gold mine was located at Makmal in the Talas oblast, and in the Soviet period Kyrgyzstan’s 170 proven deposits put it in third place behind only Russia and Uzbekistan in the union for gold production.  Today, the countries of the former USSR now constitute the world’s second largest producer, with production of about 300 tonnes a year (about 10% of the world’s total production).  Most of this comes Russia – about 200 tonnes, and Uzbekistan is the second largest producer with about 60 tonnes a year.  Kyrgyzstan currently produces about 20 tonnes a year – although there are plans to increase this, and Gold accounts for more than 90% of the minerals mined in the Kyrgyz Republic, by value.

The main deposit is the Kumtor goldfield, which is one of the largest deposits in the world and is operated by a Kyrgyz-Canadian joint venture – with an estimated 11 million ounces of gold).  Although this particular goldfield was known about, it was not developed until after Independence.  It contributed considerably to the fledgling Kyrgyz economy and helped to sustain it in the difficult times following independence, (despite facing a number of setbacks such as a cyanide spill, and a wall collapse).  Indeed, gold from Kumtor was so important for the economy of the Kyrgyz Republic, that for the period immediately after independence it represented virtually all the foreign currency earnings of the new country, and some economic statistics were (and still are) quoted in two forms – for example: GDP and “GDP (without Kumtor)”.

Further expansion is planned with, for example, extraction beginning at the Central Kyzylkumah field, which should bring over 6 tonnes of gold per year.  Other local deposits – Makmal (now virtually exhausted), Tereksay, Solton-Sary – should produce more than 2 tonnes of the metal per year. The management of Kyrgyzaltyn are also considering creating other Joint Ventures with investors from Finland or China, which would provide additional production of over 1 tonne per year.

Licenses have been issued to a number of other companies to investigate and develop other goldfields around the country.

The second largest deposit is at Taldybulak Laevoberezhniy has proven reserves of 129 tons of gold – but two companies have had their licenses for exploration and exploitation of this mine annulled for different reasons.  The exploitation of the third largest deposit, (Jeroy - with reserves of 74.7 tons of gold), has also proved controversial after the license granted to the British company Oxus Gold plc was annulled following the Tulip Revolution and then being granted to another company.  The affair even embroiled the British Prime Minister, Tony Blair and President Kurmanbek Bakiev in a sharp exchange of views.  Oxus Gold eventually sold their shares in the operating company, the Talas Gold Mining Company, to KazakhAltyn, one of the biggest Kazakh gold mining companies.

The rules concerning gold production have been relaxed in recent years and now private individuals can prospect for gold and are allowed to sell their finds directly to the market and several prospecting collectives have grown up around the country. In a number of places it is possible for amateurs to pan for gold – such as around Sary Chelek, outside Kopuro Bazaar and near Ece Naryn.

In 2000, a local unemployed man found a gold nugget near the Kasan river in the Chatkal region and a “gold-rush” started. In fact, this is nothing new … there used to be a mine in Terek Sai operating in the last century, but it concentrated on extracting Antimony. Now it has changed the emphasis and is prospecting for gold.

“Altynbeks” of all ages – young and old alike – can be seen on river banks panning for the mineral. Some of the locals have dug small “mines” on their property and work underground. Some report finding about a quarter of a gram a day – they receive about 420 som (about USD10) per gram … just about enough to sustain a living.  It is thought that about half of the local population are involved in the “industry” – surviving by digging out golden sand in mountain brooks. Nobody knows exactly how much gold all these people extract, but some say that it is comparable to a small mining enterprise.

It is possible to find examples of jewellery made from Kyrgyz gold in many of the jewellery shops in Bishkek.

The Historical Museum in Bishkek has a display called the ”The Gold Fund” which includes several notable archaeological finds such as the Shamsy Horde.

A couple of weeks ago I got a telephone call from David, another ex-pat, whose mother was visiting him in Bishkek for the first time.  He wanted to discuss where he could take her, what he could show her, … and, as I work in tourism, he thought I would be a good person to brainstorm some possibilities: … which of the nearby valleys were worth a visit?, was it too early to plan a trip to Lake Issyk Kul?, what shows or concerts were being being performed in town at that time?, were there any exhibitions?, and so on.  We discussed various suggestions – the theaters, the parks, the museums – including the Historical Museum.

Now, the Historical Museum is located in the large marble clad “cube” in Bishkek’s main square – Ala Too Square, (which has recently undergone a major renovation).  In front of the museum stands the statue of “Erkindik”. Erkindik is Kyrgyz for Freedom - or Liberty - and hence the monument is known as Bishkek’s Statue of Liberty.  To the right is a large flagpole which flies an enormous Kyrgyz flag – some thirty square meters of flapping crimson and yellow – and attended by two sentries mounting a ceremonial guard.  Once in a while the “changing of the guard” gives a fantastic “photo opportunity” as the replacement sentries goose-step their way to the foot of the flagpole

It is listed in most of the guide books to Kyrgyzstan as an interesting place to visit, mainly because it still has large hagiographic displays from the Soviet period depicting scenes from the life of Vladimir Illych Lenin.  (It used to be called the Lenin Museum.)  You can’t miss him … as soon as you enter the museum there is a large statue of him striding forth above the wide marble staircase in front of you.

I thought that Mum was probably of that age group that would remember the Soviet Union, rather than the Russian Federation, and would probably be interested to see that period of history through a different perspective.  When he said, “Yes, of course we’ll do the Historical Museum”, it was almost as if he was dismissive about it … after all Historical Museums are all very similar throughout the world, and although I have fond memories of the guided tour around the one in Tirana, (Albania), I must admit that perhaps it didn’t sound like a scintillating and inspiring suggestion.  So I added, almost as an afterthought, “… and see if it is possible to see the “Gold Fund”.”

“What’s that?”, he asked.

A good question … let me try and explain:

The museum has a lot more to offer than just Lenin.  The spacious exhibition halls have displays showing the history of the region dating from ancient times, about the culture and handicrafts of the nomadic Kyrgyz and some interesting painted ceilings.  Like most museums, however, it has a lot more artifacts than it has the space to display.  Much material is kept in store and the public rarely get the opportunity to see it unless some special exhibition is organized.  For a long time the Gold Fund was relegated

I had heard about the Gold Fund almost as soon as I arrived in Bishkek, some fourteen years ago.  The central items of the collection were discovered by accident the Shamsy valley, about sixty kilometers to the East of Bishkek, when a tractor driver ploughing a field dug up some up some ancient Scythian artifacts, including a golden face mask, a headdress and other jewellery.    There were rumours that the horde had, like so many other valuable archaeological discoveries, been crated up and shipped off to Moscow or St. Petersburg, (Leningrad), but that wasn’t so.  They were safely ensconced in the museum’s strong room and brought out only for special occasions or for some photographer to “snap” for some publication.

Some years later, an official at the Ministry of Culture invited me to a meeting at the Historical Museum and I got my chance to see it.  I wasn’t told what I was going to see – I was just told to follow her.  We descended into the bowels of the museum, away from the display cabinets to small rooms filled with Dexion shelving and cardboard boxes holding goodness knows what.  I signed the record book thinking, “What have I let myself in for?”, and was led past a thick metal door into a small room containing shelving and a large table.  One by one, cardboard boxes were taken down from the shelves and opened … and my eyes popped out of my head as they settled on ancient crafted objects.

They started by showing me some small items – archaeological finds made of bronze, some adorned with precious of semi-precious stones.  My initial reaction was, basically, blasé … “OK, interesting, but nothing special … The British Museum has plenty of stuff like this …”, but as more and more boxes were opened, I became more interested.  It helped that my hosts were able to tell me stories about the discovery of each object, which was as interesting as what the object was, and what it was made of.

I was asked if I thought tourists would be interested to see these exhibits?  It was obviously a rhetorical question – Yes, of course they would – but not in the strong room.  It was too deep in the building and unwelcoming, and too small – only about four or five visitors could be accommodated at once, with difficulty.  However, putting the objects on permanent display was not a viable option – security required a special room and display cabinets, but the Ministry didn’t have the funds available to make it possible.

This is when the Americans enter the story.  A special grant paid for the necessary construction work and last year the Gold Fund became a part of the permanent exhibition – albeit for a separate supplementary fee.

When I heard that the Gold Fund was now open for viewing, I tried to arrange a visit to it for my staff.  I say “tried” because we failed to get in … first of all the exhibition is not open every day, and then we happened to hit “Lunchtime” … and on that day – there was a visiting delegation and so so lunch was an “extended lunch”, and although we hung around for about an hour, the key holder still hadn’t returned so I said, “Enough, I’m going back to the office!”

Hence, I said to David, “… see if it is possible to see the “Gold Fund”.”

About a week ago, when David called me once again, (about something else), I asked him how his mother’s visit went.  “Great,” he said, “and thank you for the suggestion about the Gold Fund – that was really great.  She really enjoyed that.”

That whetted my appetite once again.  Maybe it was worth another go to try and see it.

Now, it just so happened that on Monday I was walking walking past the Museum and I remembered the conversation, so I decided to call in and ask about the Gold Fund.  Now, the museum is closed on Mondays, but the door was open and so I went in.  The place was deserted – well, after all, it was technically closed.  I walked about looking for someone to ask, and a woman came charging up to me saying: “We’re closed.  We’re closed.”

“Yes, I know,”, I replied, “but I wanted to ask about the Gold Fund.”

“Yes, yes.  Tomorrow,” she said, “but not now.  We’re closed.”  Remembering the last time, I asked about lunch – maybe it would be better to come in the morning.  “Yes, yes, anytime after ten.”

So, Tuesday, I gathered a small group, (including the three “baseball kids”: Maxim, Andrei and Sveta – see A Baseball Match), and off we marched to the museum.    When we arrived I began to get a bad feeling in the pit of my stomach – the girls on the cash desk didn’t seem to know anything and the key holder wasn’t anywhere to be found – history seemed to be repeating itself.  This time, however, we only had to wait about ten minutes, and had we been doing a tour round the museum, (but we had all done that before, anyway), then I am sure everything would have been ready for us when we arrived back at the main hall.

We paid the fee and she led us downstairs to a strong room.  Not the same one I had been to before – but still downstairs.  It was bigger than the previous one and the objects were in display cabinets rather than in cardboard boxes on Dexion shelving.  I think I preferred seeing the objects unwrapped, rather than displayed behind glass – but you can’t have everything.  I was just glad to see the objects on display at last.

It’s a fairly small exhibit.  As well as the Shamsy Horde, the exhibits included artifacts discovered during the construction of the Toktogul Reservoir, a variety of ancient coins and ingots and a couple of ancient Buddhist sculptures.  I found the fine craftsmanship fascinating.

All in all, the visit took about half an hour, or about an hour and a half together the walk to and from the office and the ten minute wait for the key to be found.  It made a pleasant break from the daily routine.