Kyrgyzstan’s gold mining sector has been attracting attention over the past few weeks. A major underground deposit has entered production, foreign companies have been making significant progress and domestic gold reserves have been growing.
Last week, full-scale operations commenced beneath the surface at the country’s Kumtor gold deposit. It is one of the largest in Central Asia. Mining has been ongoing at the site since the late 1990s.
The nation’s government nationalized this resource in 2021 after obtaining it from Centerra Gold Inc. (TSE: CG) (NYSE: CGAU) (FRA: GOU). It holds up to 147 metric tons of gold reserves and has generated over US$3.4 billion for Kyrgyzstan’s government since that time through open pit extraction.
“The underground project is expected to operate for 17 years, and geological reserves of 147 tons of gold have been added to the state balance sheet,” President Sadyr Japarov’s press service said in a statement.
Open pit mining will continue as underground production begins. Thus far, approximately 1,600 metres of tunnels have been dug.
Furthermore, state miners plan to start processing a tailings pond that is estimated to hold over 100 tons of gold.
Kyrgyz geologist Rozalia Djenchuraeva told The Times of Central Asia that the site’s reserves may be even more robust that the most recent estimates.
“Even on Soviet maps, one can see that there is a lot of gold in this area,” she said. “Gold-bearing veins run under the glaciers from the Kyrgyz-Chinese border through Kumtor and extend westward for many kilometres.”
Kumtor. Photo credit: Administration of the President of the Kyrgyz Republic
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Indian mining company prepares for production at Altyn Tor
Deccan Gold Mines Ltd (BOM: 512068) is aiming to start producing yellow metal from its Kyrgyzstan operation by the end of October. It will mark the first time the site has entered the production phase while being overseen by the company.
Deccan is India’s only gold explorer listed on the Bombay Stock Exchange. The trading hub is the sixth largest in the world. Additionally, Deccan is the first Indian company that has ever entered Kyrgyzstan’s mining industry.
The gold miner has commissioned 11 conveyors and finished successful trials with crushers at the Altyn Tor project. A ball mill has also been installed that will become operational within the next couple of weeks.
“Preparations for commercial production of dore bars from the gravity circuit are underway,” said Managing Director, Hanuma Prasad Modali.
“Progress is also ongoing on the tailings storage facility, power infrastructure and civil works, ensuring that the project remains on track despite challenging weather conditions.”
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Kyrgyzstan one of many nations stockpiling gold
In other recent news, the nation’s gold reserves have been increasing significantly. Kyrgyzstan has become part of the gold hoarding trend prevalent throughout many parts of the globe in recent months.
“National Bank of the Kyrgyz Republic data shows its gold reserves rose by over 1 tonnes in July – the fourth consecutive month of additions,” said World Gold Council Senior Analyst, Krishan Gopaul.
During the fourth quarter of 2024, state reserves rose to 38.1 tonnes from 25.9 tonnes in Q3.
Gold is Kyrgyzstan’s number one export commodity. In 2023, it accounted for almost 39 per cent of the country’s national exports, valued at approximately US$1.3 billion.
In July, Kyrgyzstan state-owned gold miner Kyrgyzaltyn OJSC entered an agreement with the Malaysian company Public Gold Marketing Sbn Bhd to sell US$36 million worth of gold to the Southeast Asian country. Malaysia likely saw it as an opportunity to secure high-grade gold at a competitive price while diversifying its asset holdings.
Aside from Malaysia, it primarily gets sent to Switzerland, Hong Kong and the United Arab Emirates.
Kyrgyzstan’s National Bank markets large quantities of gold internationally with the help of Swiss financial institutions.
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