BISHKEK/JAN. 29 — In his first executive order after being sworn-in, Kyrgyzstan’s President Sadyr Japarov banned foreign companies from taking stakes in new mining projects.
The decree plays to Mr Japarov’s supporters, who backed him in a coup last October because of his nationalist rhetoric and policies, but risks antagonising foreign investors.
Importantly, Mr Japarov, who has previously called for the nationalisation of the Kumtor gold mine in the east of the country, said that the order did not affect current projects. Kumtor is the largest industrial project in Kyrgyzstan, accounting for 13% of its GDP, and is owned by Canada-registered Centerra Gold.
The decree, published on the Kyrgyz presidential website, said that a new national mining company will be set up to develop future sites and that 90% of all workers at mines should now be Kyrgyz. Another common complaint in Kyrgyzstan is that mining projects employ too many foreign workers.
Foreign investors in Kyrgyzstan said that they had been expecting Mr Japarov to make an early policy move to please his supporters and that it was unlikely to affect their operations.
“What deposits are really that attractive to investors and do they have the money and expertise to do it themselves?” said one Bishkek-based analyst who wanted to remain anonymous.
Artem Volynets, the CEO of London-based Chaarat which owns the licences for the Tulkubash and Kyzyltash gold mines in Kyrgyzstan, agreed with this analysis.
“This new order does not affect us,” he told The Bulletin. “Our mining licences are valid until June 2032.”
— This story was first published on Feb. 1 in issue 470 of the Central Asia & the South Cacuasus Bulletin