Authorities in Kyrgyzstan have declared a state of emergency and curfew after police clashed with protestors who have forced the country’s largest enterprise, the Kumtor gold mine, to shut down.
Since Tuesday, hundreds of protestors have blocked the road to the high-altitude mine (or thousands, depending on the source). They are demanding Kumtor pay for new schools, hospitals and roads in the region, and calling on the government to tear up the existing operating agreement. On May 30, protestors seized an electrical substation and cut power to the mine.
Officials said 92 people had been arrested and 55 wounded, including security forces, in the May 31 clashes around Barskoon on the southern shore of Lake Issyk-Kul. Police used stun grenades and rubber bullets, according to Kloop.kg. Some local news sites reported that protestors took the head of the district hostage, later exchanging him for detained protestors.
In an open letter to the prime minister, Kumtor outlined how it has fulfilled many of the protestors’ demands through the tens of millions of dollars it pays into a development fund for Issyk-Kul province and other contributions.
But few in Issyk-Kul see any benefit from those contributions. The company has said local authorities give it little say in how the funds are used and fears much of the money disappears into Kyrgyzstan’s seemingly bottomless pit of corruption.
The clashes this week comes as Bishkek is negotiating a new operating agreement with Toronto-listed Centerra Gold, which owns Kumtor. Since a bloody uprising toppled President Kurmanbek Bakiyev in 2010, Centerra has been repeatedly targeted for allegedly getting too sweet a deal in a 2009 agreement with the Bakiyev regime. Some lawmakers, leading street rallies of their own, have called for nationalization. Though the government of Prime Minister Jantoro Satybaldiyev rules that out, it has not yet announced the results or substance of its ongoing negotiations, which are due to be finalized on June 1.
Though electricity has been restored, Centerra has put mining operations on hold, a source in the company confirmed on May 31. The source, who is familiar with the regular roadblocks since Bakiyev’s overthrow, described the protestors this week as especially aggressive.
Operations at the complex, high-altitude mine cannot be started and stopped quickly, so the shutdown is likely to hurt Centerra’s production targets and thus Kyrgyzstan’s budget as tax revenues fall. That, in turn, should impact the government’s ability to pay wages and pensions. Kumtor is responsible for over 50 percent of exports and, in a good year, 12 percent of Kyrgyzstan's GDP.
Ironically, since the Issyk-Kul Development Fund is based on 1 percent of Kumtor’s gross revenues, the protestors’ infrastructure demands will also see less funding: “By stopping the mine they are also cutting off the cash which could build roads, schools and hospitals,” said the company official.
The clashes are a serious test of the government’s authority and ability to project power outside the capital. Some observers feel the security forces are too timid to end effectively the illegal roadblock. Since Bakiyev’s bloody overthrow, prosecutors have accused a number of soldiers of murder when they fired into the crowd to protect the former president in April 2010. Though the trials have not concluded, few other members of the security forces want to be in their position, citing “orders from above” as a defense.
**UPDATE: Late on May 31, protests spread to Jalal-Abad, where some reports say demonstrators have attacked a government building and are demanding the release of Kamchybek Tashiev. Tashiev, who hails from Jalal-Abad, led violent protests for the nationalization of Kumtor last October. He is serving a short jail sentence in Bishkek. Demonstrators in Jalal-Abad and Maili-Suu are also calling for the Kumtor operating agreement to be nullified.