A Canadian Gold Mine in Kyrgyzstan Was Shut Down By Rock Throwing Protesters

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I’m willing to wager, reader, that you’re not too familiar with Kyrgyzstan. I’ve been reading about it for the past couple of days and I still can’t spell Kerrgisz… in less than 10 seconds with my eyes closed (Does the z or the s go first?)

Kyrgyzstan borders a few ‘Stans’; Tajikistan, Kazakhstan, and Uzbekistan. It claims a few exports of cotton, wool, meat—and gold. It also hosts a U.S. Air Force base that has been in use during the Afghan war and would seem to be of increased importance given Russia’s recent involvement in Syria.

Kyrgyzstan is of strategic importance to the west, as it happens to share a western border with China, and is a stone’s throw from Afghanistan and Pakistan. So that being said, it’s obvious that regardless of any internal conflicts, (which will be touched on momentarily) Kyrgyzstan is volatile.

Since its dissolution from the USSR in 1991, Kyrgyzstan has seen two governments violently overthrown through clashes of regional and ethnically charged violence. The conflicts are generations old, tribal, stoked by north/south rivalries, and in the most recent viciousness, related to the ongoing hatred between Kyrgyz and Uzbeks.

In 2010, tensions came to a head when, following an election that saw a few Uzbek politicians posted to prominent positions, conflict boiled over in the southern part of the country in scenes that resembled the threat of an “ethnic cleansing.” The Asia Times described it as such: “violence erupted that turned thousands of Uzbek blocks and businesses into ashes and saw [hundreds of] dead bodies line the streets of two southern cities.” 470 people were killed in theses clashes that also left 400,000 displaced.

Needless to say, current Prime Minister Zhantoro Satybaldiyev already has his hands full, so when the Canadian owned Kumtor Gold Mine, which accounts for 12% of Kyrgyzstan’s entire economy got shut down by protesters last week, many of the country’s establishment (as well as CEOs in Toronto) must have been sweating. Not just because of the economic implications, but also because of what such a blatant thwart could represent, as wind to the sails of a government opposition that may or may not still be chomping at the bit for a nationalist Kyrgyz reform.

Centerra Gold, whose head offices are at 1 University Avenue in Toronto, claim to own 100% of the Kumtor Gold Mine. It is the largest foreign owned mine established in the former Soviet Union and, in 2012, produced 315, 238 ounces of gold. By this weight-in-gold calculator I found on the internet, that’s the equivalent of $452,617,211.72. That’s four hundred and fifty two million, six hundred and seventeen thousand, two hundred and eleven dollars and, (but who’s counting?) seventy-two cents in just one year.

On May 31, thousands of anti-Centerra protesters stormed the Kumtor mine on foot and on horseback, hurling rocks and besieging it, cutting its main power supply and putting a halt to production before being dispersed with stun grenades and rubber bullets. The protesters demanded that the mine be nationalized so that the almost incomprehensible value of the above mentioned gold would go solely to the Kyrgyz people. 80 were arrested and 55 were wounded in clashes with police, causing the Prime Minister to declare a state of emergency, call in the army, and impose a curfew on the region.

Perhaps more significantly, the protest at the mine which lies in the north eastern region of Kyrgyzstan, triggered violence in the consistently unstable south, where in the city of Jalalabad hundreds more protesters stormed a governor’s building, expelling its officials and appointing their own ‘people’s governor’, a man by the name of Medet Usenov. Their demands echoed those of the Kumtor protesters, that the mine be nationalized, but also went one step further, and called for the release of three opposition lawmakers who had been arrested in October for similar protests and found guilty of trying to seize power by force. Then, on June 2nd, the government struck back by abducting Usenov outside of his home, which of course, prompted another rally.

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The Prime Minister is blaming the opposition for the protests, accusing it of using the anti-Centerra sentiment as a call to topple the government. The blockade of the mine has since been lifted after the Prime Minister visited with protesters and promised to negotiate with Centerra, who announced Tuesday that it would begin to consider offering a stake in the mine to the Kyrgyz government. The curfew remains until June 9th.

For better or for worse, this leaves Centerra in a precarious balance between two polarized Kyrgyz perspectives. I corresponded with an individual who represents foreign owned mines as a “community relations consultant” in regions of the world where the cultural climate is similar to those surrounding the Kumtor gold mine. He prefers to remain anonymous, but offered some interesting insights into what is at play in Centerra’s complex relationship with Kyrgyzstan, as well as in regards to Canada’s foreign mining projects in general.

What he told me is that while Centerra has set up agricultural development projects around the mine to help spread some wealth beyond its employees, the locals don't have much experience with capitalism, “So,” he said, “when they see wealth, their idea of entrepreneurship is forming an organization to cajole or extort money from anyone who looks like they might get even a little more than anyone else… local people in these regions have never encountered a private sector corporation before and most of them had never seen foreigners up until 15 years ago… In many of these societies locals use an equality-based concept of justice. Everyone puts in the same amount of work and everyone gets an absolutely equal share of the benefits in the end. Any deviation from strict income equality is seen as unfair.” Which all sounds a lot like the ideals of what Kyrgyzstan was called prior to 1991.

The scenario unfolding in Kyrgyzstan focused around Centerra’s Kumtor mine could play out similarly in regions all over the world where Canadian companies have mining interests.

I found some numbers on this federal government website entitled “Building the Canadian Advantage: A Corporate Social Responsibility Strategy for the Canadian International Extractive Sector” which kind of supported a statement my source made when he said, when addressing Canada’s reliance on the extractive sector, that “Canada would be Portugal without its mining,” and the numbers don’t lie.

In 2008, over 75 percent of the world’s exploration and mining companies were headquartered in Canada, holding an interest in over 100 countries around the world, with total investments in the ballpark of over $120 billion. That’s a lot at stake in countries where if the mood strikes right, a mine may be violently shut down and nationalized.

So in Kyrgyzstan, there are protesters on horseback flinging rocks at a Canadian mine. A mine that is now embroiled in a political conflict that is wrapped up in ethnic cleansing style violence, in an unnstable region that is of the utmost strategic importance simply because of its location on the world map. It will be interesting to see what guidance is sent from the mining CEOs in Toronto and Calgary, and, perhaps, from the Prime Minster, regarding “corporate social responsibility” in a situation that could possibly become a routine concern for Canada’s corporate foreign affairs.

Follow Dave on Twitter: @ddner

Previously:

Bride Kidnapping in Kyrgyzstan

A Gang of Greek Activists Torched the Skouries Gold Mine

The Gold Rush that Is Destroying Suriname's Rainforest