Natural Resources

Natural Resources

Soviet geologists have estimated Kyrgyzstan's coal reserves at about 27 billion tons, of which the majority remained entirely unexploited in the mid-1990s. About 3 billion tons of that amount are judged to be of highest quality. This coal has proven difficult to exploit, however, because most of it is in small deposits deep in the mountains. Kyrgyzstan also has oil resources; small deposits of oil-bearing shale have been located in southern Kyrgyzstan, and part of the Fergana oil and natural gas complex lies in Kyrgyzstani territory. In the Osh region, four pools of oil, four of natural gas, and four mixed pools have been exploited since the 1950s; however, the yield of all of them is falling in the 1990s. In 1992 their combined output was 112,000 tons of oil and 65 million cubic meters of natural gas, compared with the republic's annual consumption of 2.5 million tons of oil and 3 billion cubic meters of natural gas.

Kyrgyzstan's iron ore deposits are estimated at 5 billion tons, most containing about 30 percent iron. Copper deposits in the mountains are located in extremely complex mineral deposits, making extraction costly. The northern mountains also contain lead, zinc, molybdenum, vanadium, and bismuth. The south has deposits of bauxite and mercury; Kyrgyzstan was the Soviet Union's main supplier of mercury, but in the 1990s plummeting mercury prices have damaged the international market. A tin and tungsten mine was 80 percent complete in 1995. Kyrgyzstan had a virtual monopoly on supplying antimony to the Soviet Union, but post-Soviet international markets are small and highly specialized. Uranium, which was in high demand for the Soviet Union's military and atomic energy programs, no longer is mined in Kyrgyzstan.

The Soviet Union's largest gold mine was located at Makmal in Kyrgyzstan, and in the Soviet period Kyrgyzstan's 170 proven deposits put it in third place behind only Russia and Uzbekistan in gold production in the union. Two more promising deposits, at Kumtor and Jerui, have been discovered. Kumtor, said to be the seventh-largest gold deposit in the world with an estimated value of US$5.5 billion, is being explored by the Canadian Metals Company (Cameco), a uranium company, in a joint-venture operation. Gold deposits are concentrated in Talas Province in north-central Kyrgyzstan, where as much as 200 tons may exist; deposits in Makmal are estimated at sixty tons. Deposits adjacent to the Chatkal River in the northwest amount to an estimated 150 tons.

The terms of the agreement for Kumtor exploitation with Cameco, which gains one-third of profits from gold extraction, caused public concern in 1992. To improve control of the mineral-extraction and refining processes, and to address the uncontrolled movement of precious metals out of the country, President Akayev created a new administrative agency, Kyrgyzaltyn (Kyrgyzstan Gold), to replace Yuzhpolmetal, the Soviet-era body responsible for precious metals. In January 1993, Akayev also brought the country's antimony and mercury mines into Kyrgyzaltyn. The latter are especially important because mercury is used to refine gold. Control of the mercury mines makes more likely the realization of Akayev's hope that Kyrgyzstan will become more than just a supplier of raw materials.

Although Kyrgyzstan has one of the largest proven gold reserves in the world, in the early 1990s fuel and spare parts shortages combined with political disputes to hamper output (see Government and Politics, this ch.). Production in 1994 was 3.5 tons, but the output goal for 1996 was ten tons.

Kyrgyzstan's major energy source, water, has also been discussed as a commercial product. The export of bottled mineral and fresh water was the object of several unrealized plans in the mid-1990s.

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