Another Mine Headache in Kyrgyzstan: Uranium

In the past, it was Kyrgyzstan’s gold mines that caused periodic uproar among the country’s population. But this spring, it was a uranium mine that roused protests, leading Kyrgyz President Soononbay Jeenbekov to announce a ban on uranium mining in the country on May 4. There’s a sizable gap between what Kyrgyz political leaders have said and what the Canadian firm that ultimately owns a controlling stake in the flashpoint project, the Kyzyl Ompul mine 77 miles east of Bishkek, is saying. Once more, a mining project is at the root of a conflagration in Kyrgyzstan that mixes the difficulties of politics, development, ecology, and progress.

Over the last several months, residents in the village of Kok-Moynok have agitated against the development of a nearby Soviet-era uranium mine. Kok-Moynok sits at the edge of Boom Gorge, a canyon cut by the Chuy river as it passes north. To the east is Balykchy and Kyrgyzstan’s picturesque glacial lake, Issyk-Kul.

In November, villagers attended a public hearing where some voiced opposition to the development of the mine. While some local leaders pointed to the potential benefits of the development, others expressed concerns about the environmental impact of the project.

While Kyrgyzstan has some uranium deposits and in the past supplied the Soviet Union and then Russia, at present it has no recorded uranium exports. Its potential is limited when compared to Kazakhstan, which boasts the world’s largest uranium reserves after Australia and currently is the top global producer. From 1946 and 1967, more than 9,000 tonnes of uranium were produced at a mine in the Mailuu-Suu district of Jalal-Abad Province. A mining combine in Kara Balta, 38 miles west of Bishkek, processed the uranium. Although Kyrgyzstan ceased mining uranium, the facility at Kara Balta continued operations processing Kazakh uranium until roughly 2015, when it shut down for lack of work.

While Mailuu-Suu and Kara Balta have been central to discissions regarding the legacy of Soviet uranium mining – namely tailing pits in geologically unstable areas, subject to dam breaches, leeching problems, and lasting accusations of poisoning the population – the source of the recent brouhaha is a far less-known site.

Azarga Uranium, a Canadian firm with the bulk of its business in the United States, owns a 70 percent stake in UrAsia in Kyrgyzstan. UrAsia in turn has an exploration licence to the Kyzyl Ompul Project area, which encompases 42,379 hectares. According to Azarga’s description, the Kyzyl Ompul Project “has been explored since the 1950s for uranium, with most historic exploration occurring during the 1950s and 1960s.” UrAsia, Azarga says, completed various survey and sampling activities at the site from 2005 to 2008. In 2012, the company says, a “more extensive exploration program commenced.” In 2010, UrAsia reportedly acquired its current license to exploit the area and according to Azarga Uranium, that license is valid until 2020.

By 2017, Azarga announced that UrAsia had executed an “earn-in” agreement with a Kyrgyzstan-based company, Mining Investment Company Alliance. Alliance had the option to acquire a 100 percent interest in the Kyzyl Ompul Project in exchanged for $7.6 million and a 2 percent net smelter royalty. But in 2018, that agreement was replaced with a similar earn-in agreement with a different company, the Central Asian Uranium Company, whose representatives, Azarga said in the announcement, “were party to the terminated agreement.” In any case, the new agreement’s terms included nonrefundable cash payments on a set schedule and the option for Central to acquire a 100 percent interest in the project, plus a residual smelter royalty for UrAsia.

It’s not clear what activity kicked up local opposition, given the previous exploratory work and issuance in 2010 of a license, but the results this time were quick. Following the November village public hearing there appears to have been a winter lull, but in mid-April demonstrations took place in Balykchy. As of 2009, the village of Kok-Moynok had just over 500 residents – in the same census Balykchy had 42,875. According to RFE/RL, several hundred gathered on April 19 to demand UrAsia’s license be revoked. On April 21, a petition was launched in Issyk-Kul Province to halt work at the Kyzyl Ompul site. Within a week, the petition had 30,000 signatures but even before that demonstration of support, Kyrgyz Prime Minister Muhammedkaly Abylgaziev ordered work at the site stopped.  And on April 25, Deputy Prime Minister Kubatbek Boronov met with protesters who had come to Bishkek to lobby their case.

As RFE/RL reported, Boronov said shortly thereafter, "I am stating officially that [Kyzyl Ompul] is shut. The company has no rights for extraction or even geological exploration. We have withdrawn the license."

On May 3, the Kyrgyz Parliament voted to prohibit the exploration and extraction of uranium in the country. The next day, President Sooronbay Jeenbekov said decisively, “There will be no mining of uranium in Kyrgyzstan.”

On May 3, Azarga, which terms the Kyzyl Ompul Project a “non-core” project, said it “has not received official notification from the State Committee on Industry, Energy and Subsoil Use or the Government of the Kyrgyz Republic that the Kyzyl Ompul Uranium Project license has been revoked; however, activities at the non-core Kyzyl Ompul Uranium Project have been suspended.”

The company also underlined the fact that “before this ban can be implemented into law, a strict lawmaking process must be followed, requiring further parliamentary readings and the President’s sign-off of the proposed law.” It also commented that “if deemed appropriate,” it would “ensure that the Company’s and UrAsia’s rights are preserved.”

All that to say: Azarga had a legal agreement with the Kyrgyz government for rights to the Kyzyl Ompul Project site and if the Kyrgyz government wants to walk back its commitments, it should expect to pay for it.

And therein lies a classic Kyrgyz saga, played out most often in reference to the Kumtor Gold Mine: Matters of nationalism, environmental concerns, international business, and policymaking are not always easy to square. Kyrgyzstan’s dynamic, but immature, political culture excels at speaking quickly in an attempt to calm a frustrated public, but it cannot always follow up that talk with action. Unlike the Kyrgyz government, international businesses read the fine print and have their lawyers on speed dial. It’s bad business to walk back commitments already made.

For now, uranium mining in Kyrgyzstan is a dud. It was never big business anyway, but the overarching narrative may not sit well with international partners eyeing investments in Kyrgyzstan. The mountainous country has few lucrative economic sectors, and those it does have – mining of various kinds being the most critical – come with serious local and environmental baggage. So far, Kyrgyz political leaders have not figured out how to thread the needle: addressing local concerns while also making smart economic and business decisions.