Kumtor Gold Mine, Kyrgyzstan

The Kumtor open pit gold mine is located in a majestic surrounding in the Kyrgyzstan mountains. It receives continued support by the European Bank for Reconstruction and Development, despite several accidents in the past and ongoing environmental damages from the mining operations.

The Kumtor Gold mine - Background

A new loan for Centerra Gold

In November 2010, the EBRD decided to support Centerra Gold Inc. with a USD 150 million three-year revolving debt facility (i.e. the EBRD will provide the funds on demand from Centerra). The loan is to support the company’s ongoing operations and potential acquisitions of mining assets in Mongolia or Kyrgyzstan.

As of December 2011 the Company has not drawn (pdf) the EBRD’s financing. In view of Centerra's current expansion of production of in Kyrgyzstan (Kumtor mine) as well as in Mongolia (Boroo/Gatsuurt operation), chances are that the loan will be used for these activities.

Bankwatch and Kyrgyz groups have asked the EBRD (pdf) for more information on the loan prior to its approval. Yet “commercial confidentiality” was the excuse for not even disclosing the usual Project Summary Document.

Quick facts

  • owned by Canadian mining company Centerra Gold Inc.
  • largest gold deposit project managed by a Western company in Central Asia
  • produced 17,66 tons of gold (2010), plans are to further expand operations
  • generates appr. 10 per cent of Kyrgyzstan's GDP [1], but also significant environmental and social threats
  • the Kyrgyz Republic now owns 33 per cent of Centerra Gold Inc.

Fragile surrounding

The Kumtor open pit gold mine is located in a remote area of the Tian-Shan mountain range in Kyrgyzstan at an altitude of 4000 metres, next to the Sarychat-Ertash reserve and not far from the Issyk-Kul lake, an important regional tourist attraction.

The mine is being developed in fragile conditions of permafrost and in the vicinity of glaciers that feed fresh waters into the transboundary Naryn River. It is an area of surreal beauty.


Waste rock on the glaciers


Dangers for the environment

Damage to glaciers

The mine pit slices through two glaciers (Lysyi and Davidov). This vicinity and the practice of storing waste rock directly on the glaciers damages these enormous natural ice sheets.

The glaciers, already suffering from the impacts of climate change, are melting much faster and have shrunk tremendously in recent years, as Kyrgyz scientists have confirmed us.

Potential for catastrophic events

Lake Petrov and its glacier

The mine's tailings (i.e. chemically polluted leftovers) are located below Lake Petrov. The lake grew by more than 92,000 square metres annually in recent years due to a melting glacier. The lake's natural dam has become less and less stable (according to Torgoev Isakbek, author of a State Commission report on the subject).

Although there is no imminent danger, the lake's tremendous growth might cause it to break out at some point. In a worst-case scenario, the downstream tailings could then be washed away, with unforeseeable impacts on the environment.

The tailings dam foundation is also experiencing horizontal deformations and is moving down the slope [2].

Inspite of measures to stabilise the dam in 2003 and 2006 (so-called shear keys and toe berm), the dam is still continuing to move. Kyrgyz scientists believe it is caused by the facts that it has been built on an uneven slope and that the dam never freezes.

Water pollution

Likely the most serious problem at Kumtor is the slow long-term release of contaminants from current and future mining operations.

During summer operations (May through October) some five million cubic metres of waste water from the tailings are treated and discharged into the Kumtor River and eventually flow into the Naryn River (later Syrdarya) towards Tajikistan, Kazakhstan, Uzbekistan.

While Centerra Gold Inc. does not publicise data on the quality of the discharged water, people living near the Kumtor River observed an enormous decrease in fish stock in recent years and suspect that the river has already been polluted.

The seasonal glacier melt-waters and the ground water flow into the mine’s open pit at a rate up to 1000 liters/sec [3]. After contact with the rock, the water becomes chemically-degraded and is then pumped out and discharged to the environment.

See photos from our investigations in Kyrgyzstan on flickr.

Download the report by hydrogeologist Dr. Robert Moran Kumtor gold facilities, Kyrgyzstan: Comments on water, environmental and related issues (pdf).

Accidents at the mine


A blockade by villagers demanding proper compensation for the 1998 accident at the Kumtor mine

Centerra Gold has been the client of the EBRD since 1995 and the bank has failed to ensure that its client respects public social environmental concerns and social needs.

Throughout the mine’s operation, several accidents occurred, leaving several people dead and hundreds in need of treatment:

  • a cyanide and sodium cyanide spill into the Barskoon River in May 1998
  • a spill of 70 liters nitric acid in July 1998
  • an ammonium nitrate spill in January 2000
  • collapses of a 200 metre high pit walls at the mine in 2002 and 2006.

While the company plays down the cyanide spill in 1998, more than 1000 people have turned to the Barskoon local public association “Karek” in need of assistance to protect their rights and to claim compensations for the damages caused by the spill.

A law suit is ongoing since 2005. 24 Barskoon villagers with documented proofs of poisoning demand compensation for moral and health impacts from the mining company.

    “The company did not notify residents of Barskaun, who use the water for drinking and irrigation, until 5 hours after the accident. As a result, over 2,500 people were poisoned, 850 people were hospitalized and at least four of those patients died.”

    Source: Earthworks


Notes

1. EBRD Country Strategy for Kyrgyzstan, 2011

2. Centerra Technical Report 2011

3. ibid.


For more information, contact our Central Asia officer Vladlena Martsynkevych.

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Publications

Bankwatch Mail

March 7, 2013

In a landmark ruling in late February, the Kyrgyz parliament voted to renegotiate a contract signed in 2009 with the Canadian mining firm Centerra Gold Inc. for the exploitation of the Kumtor gold mine, near the border with China. The 2009 deal is the most recent form of the contract between the Kyrgyz state and Centerra that has had a presence in the central Asian republic since the late nineties.

Bankwatch Mail

December 14, 2012

After long delays and more than three years in the making, the European Bank for Reconstruction and Development (EBRD) finally in early November published its new mining sector policy. Yet both the consultation process and the final outcome have left “consulted stakeholders” disappointed.

Briefing

November 2, 2012

The long awaited EBRD Mining Operations Policy was released last week without much noise. It has taken the EBRD more than 3 years to prepare a document which had raised hopes it could improve the bank's activities in the mining sector. Most of these hopes, however, have not been fulfilled.

Bankwatch Mail

October 9, 2012

With the EBRD due to sign off on its new mining strategy in November this year, 22 MEPs have pointed out in an open letter to European commissioners that given the state of the policy draft the bank risks contradicting the EU Resource Efficiency Roadmap and responsible mining principles. At risk of being compromised too, Bankwatch believes, are the EU's 2020 strategy and EU commitments on climate change and biodiversity protection.

Briefing

September 18, 2012

Kyrgyzstan is a mountainous country rich in water and natural resources. It hosts one of the Earth's most important ecological regions with unique ecosystems and biodiversity and is considered the “water tower” of Central Asia due to its Tien Shan glacier reserves. At the same time, mining operations and the mismanagement of natural resources are increasing the threats posed by climate change and pollution.

Advocacy letter

July 12, 2012

The letter by the Green members of the European Parliament calls for active efforts of the EU representative at the European Bank for Reconstructoin and Development to ensure that the bank's new mining strategy endorses EU principles and standards for resource efficiency, biodiversity protection, poverty eradication, inclusive growth, transparency and public participation in the mining projects the EBRD supports.

Policy comments

June 23, 2012

(Download a short version of these comments as pdf.)

As it is now, the EBRD foresees growth in the mining sector and sees its involvement as crucial in this process. At the same time the Bank recognizes that mining can cause significant adverse environmental and social impacts, including permanent ones, and that no single mine can be sustainable since it exploits a finite local resource.

Briefing

April 25, 2012

Centerra Gold’s announcement that the February 2012 ice and waste fall into the Kumtor pit will result in a cutback in gold production indicates that the measures the company has put in place to address the causes of past pit wall failures have been ineffective since those measures were not effective at preventing Davidov ice and waste from falling into the open pit and causing the current production cutback.

Advocacy letter

April 6, 2012

With the letter Bankwatch requests information about the status of the Centerra Gold Revolving Debt Facility and raises issues and findings from the recent reports on the company’s performance.

Bankwatch Mail

March 13, 2012

It is coming up for three years since the EBRD's 2009 Annual Evaluation Overview Report “alerted Management to develop a new Operation Policy to cover all forms of non-energy related extraction of natural resources (mining policy)”. The EBRD does not appear to have been in any great rush with the preparation of this policy, and one has to wonder how long the bank will allow for the new policy to be consulted with the interested public. More importantly, how influential will public input be in setting the policy objectives and requirements?