Wednesday, January 21, 2009

The Golden Curse

Took part in dubbing a documentary yesterday and want to share some of the facts and opinions on the Kumtor case.

The project came to being in the early 90s, after an agreement between Centerra Gold, an affiliate of Canadian uranium miner COMECO and the Kyrgyz Government. Centerra operates several mines, including one in Mongolia and the Kyrgyz Kumtor site. Gold mining at Kumtor is carried out by KOC - Kumtor Operating Company, headed by a certain Khomeniuk.

In 1996, there was a cyanide accident which ended up with the pollution of water in the Barskoon river and numerous cases of cyanide poisoning in the nearby villages of Barskoon, Tosor and Tam'ga. According to some estimates, some 1200 people passed away due to the accident and many more (3000-8000) earned serious diseases.

The economic consequences of the accident are not hard to picture - Pestilence of cattle and birds, absence of demand for Issyk Kul agricultural products, a heavy blow to the tourism industry and several hundred of locals who became disabled. Even harsher are the human aspects of the tragedy - almost each family in the three villages lost someone.

Either by themselves, or after somebody's consultations and advice, locals managed to organize and carried out several protest actions. The TNC acknowledged the accident and agreed to take steps towards fixing the problem, at least by paying out compensations. But the amounts were miniscule - 500 to 1000 per capital in cash. As one villager noted "The price of a Kyrgyz is that of a pack of Canadian cigarettes!"

Some high level officials in the current parliament (e.g. Vice Speaker Isabekov) blaim the Akayev government for the bad treatment of the victims. Mr Isabekov notes that the Akayev government stroke a "peace" deal with the Canadians and simply pocketed the 180 mln USD of compensation money. Besides the initial payments, Kumtor has paid, is paying and is to be more to the families.

Currently the Government is working on reviewing the Agreement with the Canadian company. Some of the issues include

payment of all due taxes
payment of customs duties
some responsibility for the tailing dumps
a change in the composition of the governing Board
allocation of reclamation monies to fix the mining sites after extraction works

Some interesting figures and number reported by Isabekov

201 tonns of gold extracted so far
193 million - deficit/loss of the company
15 cub. m of water used by Kumtor each second
66% initial share of the Kyrgyz side in the enterprise
15% curent share of the Kyrgyz side in the enterprise.

(Source: Victims of Kyrgyz Gold, a documentary by an independent Kyrgyz filmmaker)

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