Kyrgyzstan plans to increase investment in the mining sector

“The Kyrgyz government is working on the development and intensification of investment in the mining sector”, said Deputy Minister of Economy of the Kyrgyz Republic Turatbek Dzhunushaliyev.

 

"As long as we do not observe the flow of investment and the effective implementation of all investment projects, which could give us a good incentive for further development of mining production", - he said. Every year in the Kyrgyz mining industry invested 2-2.5 billion soms, and this figure is expected to increase to 5 billion US dollars.

"The interest of a businessman, no doubt, must be a priority, it does not come here to engage in charity, and he had to earn their profits. But this should be proportionate to its participation in local community life - the creation of infrastructure, roads, lighting, water supply, social purpose objects" - added Turatbek Dzhunushaliyev.

Recall, February 20, 2015 The Government of Kyrgyzstan approved the Strategy of development of the mining industry in the years 2015-2035.

"The main objective of the Strategy is sustainable, dynamic and diversified development of the mining industry, while ensuring the balance of interests of the state, mining companies and local communities" - then said the Minister of Economy of Kyrgyzstan Temir Sariev.

"In the State balance of mineral resources has about two hundred fields with fully explored, or in a state of active exploration of mineral raw materials reserves", - he said.

According to Temir Sariev, the priorities of the Strategy - the establishment of clear rules regulating harmonized with international best practices; ensuring the development of local markets (goods, services and labor) and a full account of the interests of the local population; transformation resulting from the cost of the development of other sectors of the economy in order to diversify; minimize the impact of mining on the environment; as well as attracting foreign investments and modern technologies of search, exploration and development with a high level of security.

In particular, in the development of gold mining industry are projected three stages: investment stage (2015-2018), stage of stable revenue from gold production (2018-2023), as well as the compensation phase at lower gold production and decommissioning (2024-2035).

"In the next decade the basis of mining development will determine the gold mining industry, the potential of which is considerable, but the projects have a short life cycle. Current trend reveals the possibility of an investment boom in the period up to 2018-2019 years, after which the high returns can be stored for 5-6 years. Since 2024, there is a threat of a sharp production decline with all its negative consequences, such as loss of thousands of jobs, reduced income the state budget and social funds "- said Minister of Economy.

Currently being developed in Kyrgyzstan 8 indigenous deposits of gold (Kumtor, Makmal, Solton-Sary, Terekkan, Ishtamberdy, Jamgyr, Karakazyk and Levoberezhnoe), the total reserves of which are estimated at 131.9 tons. At the same time high in gold production in the country amounted to 26.9 tons in 2008. Due to the attraction of additional investments of gold production can grow up to 40 tons, and under favorable circumstances - up to 60 tons per year. Gold mining can provide jobs to 18 thousand people.

"In the process of preparing the Strategy was calculated the need for electricity for the administrative regions. The greatest demand for electricity deliveries occur in remote areas of the Jalal-Abad region - more than 900 million kilowatts. Total annual demand for electricity in mining if you run all the gold deposits will be 3.1 billion kWh, "- claimed Temir Sariev.

With regard to coal, in 2005-2007 it decreased to 400 thousand tons less as compared to 3.1 million tons in 1991, while the annual need of Kyrgyzstan in the coal is about 2 million tons. Among the main obstacles to the development of this industry is called the high cost of road transport, which makes unprofitable coal production at a distance of 500-600 km from the market.

Minister of Economics concluded that the implementation of the Strategy fully to attract 7.7 billion US dollars of investment, industrial output will amount to $ 121 billion, payments to the Social Fund -US $ 1.9 billion, while net cash inflow - 29.5 billion US dollars.

In 2014, revenues of the state budget from the mining industry amounted to 7.1 billion soms (about US $ 142 million.), or 17% of the total state budget revenues. According to the National Statistical Committee of the Kyrgyz Republic, the volume of direct foreign investments in the mining sector for the first 9 months of 2015 exceeded $ 4.5 million US, an increase of 257.6% compared to the same period of 2014 and amounted to 0, 7% of the total volume of direct foreign investments into the Kyrgyz economy (641.7 million US dollars).

Kyrgyz Ministry of Economy is also working on the draft program for the development of light industry and manufacturing in order to diversify the countrys economy. "We should not depend on a single industry. The branch of the republics economy should be diversified, it will first of all create a good import substitution, to take people into the workplace and earn extra income in the countrys coffers, "- said Turatbek Dzhunushaliyev.