Minister Wants Bigger Role for Local Mining Firms

Instead of bringing in foreign investors to exploit Kyrgyzstan’s mineral resources, the government should allow local mining companies to raise funds on foreign stock markets, NBCentralAsia commentators say.



First Deputy Prime Minister Daniyar Usenov last week recommended that the State Agency for Geology and Mineral Resources review the way it issues licences to gold mining companies. Usenov believes exploration work should be done by local engineers rather than by foreign companies, who currently gain an automatic right to acquire a license to mine the gold.



Member of parliament Bolot Maripov agrees with Usenov’s initiative, saying Kyrgyzstan’s mineral resources will only become profitable for the state when at least some of the exploration work is done by local firms. He believes that the government’s exploration and mining agencies have the scientific know-how and resources to do the job.



“We have to try to explore and develop mineral deposits on our own,” he said. “And if there aren’t the resources, we can seek credit lines,” said Maripov.



Osmon Artykbaev, a member of parliament and businessman, argues that right now, Kyrgyzstan cannot afford to invest funds in exploring for minerals.



“We shouldn’t make a distinction between foreign and local investors,” he said. “Let the exploration be done by whoever has the right funds and experience.”



According to Orozbek Duisheev, the head of Kyrgyzstan’s Association of Geologists, the government budget currently earmarks only 30 million soms, some 700,000 US dollars, for exploration, even though by law the allocation should be between 400 and 600 million soms, or 10 to 15 million dollars.



“If we’re now going to refuse to allow foreign investors to explore mineral deposits, this sector will soon be at a dead-end,” said Duisheev. “We have no funds now, no professionals.”



Georgy Glukhov, a senior expert on exploration with the state gold concern Kyrgyzaltyn, says that while foreign investment remains indispensable, opportunities should be created for Kyrgyz companies to raise funds on foreign stock markets to pay for exploration and development work. “By doing that, we will earn much bigger profits than we do from a foreign company which similarly raises funds on the stock market but retains some of the profit,” he said.



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)