26/01/2012 - Kyrgyzstan to revamp mining industry Parent Category: News Category: Economy, Finance & Investment News Published on Thursday, 26 January 2012 Written by TCA,BY LIDIA SAVINA BISHKEK, Jan 26 (TCA,BY LIDIA SAVINA) – Last week, Kyrgyz Deputy Prime Minister for Economy and Investment Djoomart Otorbaev met with representatives of the mining industry. In recent years, the sphere of subsoil use has experienced a lot of problems in Kyrgyzstan and serious reforms are needed in the sector.
Today only Kumtor Operating Company is operating at full capacity, so the huge potential of the mining industry is not used. It is the time for actions in this sector, said Otorbaev. Before the meeting, the business community sent to the country's leaders a letter expressing concern over the investment climate in Kyrgyzstan. "We are witnessing a situation where laws governing economic relations are developed and then adopted without taking into account the views of the business associations," the statement says. In addition, most of the bills have been considered without regard to the Law ‘On normative legal acts of the KR’, which provides mandatory Regulatory Impact Analysis.
Today only Kumtor Operating Company is operating at full capacity, so the huge potential of the mining industry is not used. It is the time for actions in this sector, said Otorbaev. Before the meeting, the business community sent to the country's leaders a letter expressing concern over the investment climate in Kyrgyzstan. "We are witnessing a situation where laws governing economic relations are developed and then adopted without taking into account the views of the business associations," the statement says. In addition, most of the bills have been considered without regard to the Law ‘On normative legal acts of the KR’, which provides mandatory Regulatory Impact Analysis.
Legislation The business community stressed the need to develop high-quality legislation encouraging creation of a favorable environment for business. The business community believes that it is a negative trend when the bills are designed to benefit a narrow group of people and contain provisions aimed at protecting the interests of one party to the detriment of the other. Otorbaev assured that amendments to the laws will be based on the wishes of investors, because the opacity of the law leads to the collapse of the investment climate. The country needs a new Law ‘On Subsoil’ and amended Land and Tax Codes. All changes will be widely discussed in the business community. New regulations on licensing and conditions of tenders will be developed. A Mining Code will fully regulate the subsoil use. According to Otorbaev, the first amendment will be made in January-February 2012. A Working Group to Reform the Sphere of Subsoil Use, headed by Minister of Economy and Antitrust Policy Temir Sariev, will coordinate all proposals and ideas. Late in February, a single working document should be developed and submitted to the Government and Parliament.
Talas General Director of Andash Mining Company Kuban Ashyrkulov said that at present none of the mining companies operates in the Talas Oblast because of conflicts of local residents with investors. In October 2011 the Talas Copper Gold exploration camp near Aral village in the Talas Oblast was attacked and burnt down by around ten horsemen armed with sticks and petrol bombs. In future, such criminal acts will be stopped by law enforcement agencies, promised Otorbaev. Director General of Talas Gold Mining Company, Eduard Kubatov, stated that at present the mining industry is in stagnation. "We are ready to support all initiatives to break the deadlock," he stressed. Andash Mining Company proposed holding a Kurultai (People's Assembly) in Talas, where investors and local people could discuss whether they need mining in this region or not. Last week the conclusion of the working group to investigate the Andash deposit was published. The experts examined the impact of drilling and blasting operations on the environment and the reliability of the tailings. The experts noted that the quarry is located at a sufficient distance from the village (more than 1.7 km) on a mountain slope in the opposite direction from the village. Modern methods of blasting can nullify its adverse effects. Consequently, a blasting risk factor for the local population can be excluded. As for the tailing, its destruction is possible only during catastrophic natural cataclysms. The document was submitted for consideration to the Government and Parliament.
Licensing
In 2011, the Ministry of Natural Resources revoked 500 licenses of companies and more than 300 licenses were transferred to other licensees. Otorbaev, however, believes it is incorrect to withdraw licenses. Entrepreneurs need guarantees for the safety of their business. Mining licenses should be privately owned and not transferable.
Mining licensing should be resumed in the near future, said the head of the Secretariat of the Extractive Industries Transparency Initiative, Karybek Ibraev. Currently, the country stopped licensing of mining companies.
The number of licenses and permits will be reduced in Kyrgyzstan, said Otorbaev. The Government plans to establish a Licensing House, which would oversee the issuing of licenses. This will help improve the country’s investment attractiveness.
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