By David Trilling
EURASIANET.org
Kyrgyzstan’s efforts to attract investors by auctioning off mining licenses, starting with the country’s second-largest gold deposit, have run into problems — both self-inflicted and beyond authorities’ control.
The ailing Kyrgyz economy is desperate for investment, with the country’s leaders eager to put years of social unrest behind them. But would-be investors have plenty of reasons to fear: in February, the government voted to scrap the existing agreement with the country’s largest investor, a Canadian gold miner. A number of foreign exploration projects have faced violent attacks in recent years by locals feeling they do not benefit from the country’s mineral wealth. And this week gold suffered its worst two-day slide in 30 years, sending convulsions through the industry. Market analysts had predicted declining gold prices, but the plunge beat even the gloomiest forecasts.
Jerooy, with an estimated 84 metric tons of gold, is supposed to be a fresh start, signaling that Kyrgyzstan is open for business. It is also a test case, one that potentially sets an example for other gold and marble mines that possibly could come up for auction later this year, according to officials at the State Geology Agency. A tender starting at $300 million opened on April 5; bidding closes on May 10.