Dubai: Kyrgyzstan, the landlocked Central Asian republic, is seeking UAE investment in its gold mines — currently being tendered for concessions and exploration.
“We are looking at foreign investment in gold mines where the UAE is well positioned to invest,” Kubanychbek Omuraliev, Kyrgyz Consul General, told Gulf News. “A number of our mines have been tendered out for concession bids, in which UAE companies could participate.”
The former Soviet Republic, which has proven gold reserves of 2,000 tonnes, exports around 25 tonnes every year. More than 220 goldmines are operating in the mountainous country which relies heavily on gold to sustain its economy.
The majority of the mines are using outdated technologies and therefore are unable to cope with the rest of the world, analysts say. On top of that, the country’s parliament’s directives on its biggest mine at Kumtor — which critics say is aimed at nationalising the company — is making investors worry over its plans with regards to privatisation and investment.
“Geological factors are delaying access to gold deposits in the high-grade zone, shifting a significant portion of the current year’s gold production to 2013–14. This, together with unfavourable weather conditions which impact agriculture, is expected to lead to a decline in growth to one per cent, from the previously projected five per cent,” Christian Beddies, head of an International Monetary Fund delegation, said in July following a tour of the country.
“While the deferral of gold production is affecting tax revenues negatively, the revenue-smoothing arrangement between the government and the Kumtor gold mining company, together with stronger-than-expected customs revenue, is expected to offset the shortfall from gold revenues in 2012.”
Bilateral trade between the UAE and Kyrgyzstan has crossed Dh1.1 billion ($300 million), dominated by Kyrgyzstan’s gold exports that crossed Dh778 million while the country imports Dh283 million worth of machinery and equipment.
“The potential for two-way trade and investment between the two countries is huge and we want to expand our trade ties with the UAE,” he said.
More than 7,000 Kyrgyz professionals live and work in the UAE while only a handful of Kyrgyz businessmen are engaged in trade. Kyrgyzstan, which became independent in 1991 following the collapse of the Soviet Union, is connected through air by FlyDubai and the country’s national carrier. Improvement in trade and tourism could help expand connectivity, he said.
The country has a population of 5.5 million and its land mass is 94 per cent covered with mountains.
Sidebar
According to recent findings of Kyrgyz and Chinese historians, Kyrgyz history dates back to 201 B.C. The earliest descendants of the Kyrgyz people, who are believed to be of Turkic descent, lived in the north-eastern part of what is currently Mongolia. Later, some of their tribes migrated to the region that is currently southern Siberia, and settled along the Yenisey River, where they lived from the 6th until the 8th centuries. They spread across what is now the Tuva region of the Russian Federation, remaining in that area until the rise of the Mongol Empire in the 13th century, when the Kyrgyz began migrating south. In the 12th century, Islam became the predominant religion in the region. Most Kyrgyz are Sunni Muslims of the Hanafi school.
