Opportunities in Natural Resources Mining in Kyrgyzstan

Following the discovery of large deposits of Uranium and other strategic minerals, the Soviet Kyrgyz Republic started receiving very significant USSR budget allocations to explore for minerals. As a result, the density and the quality of exploration in the Kyrgyz lands was higher than the USSR average.

The Soviet exploration effort yielded the discovery of diverse mineral deposits and 'occurrences' (prospects where the concentration of a mineral was detected but its economic value was not sufficiently assessed).

Many Kyrgyz mineral deposits were subject to intensive development in the times of the USSR and are now, as a consequence, either fully depleted or in the "fading" phase.

However, other deposits, especially those discovered in 1980s, never made it to production, although the USSR may have even created all the required infrastructure for it (an extreme example of that is Enylchek - an entire town built by the USSR in the middle of nowhere around several polymetal deposits, completed in 1988 but never actually populated).

Now briefly about the most notable minerals of Kyrgyzstan.


The most exciting mineral to mine in Kyrgyzstan is gold - the country has both hard rock and placer deposits. Dozens of companies are active in gold production, including a regional giant - Centerra Gold Inc., listed on the Toronto Stock Exchange, which controls the Kumtor mine producing over 500,000 oz of gold per annum. (This company is now undergoing a Government-negotiated restructuring, as a result of which the Kyrgyz Republic should receive 100% of the Kumtor mine in return for canceling its share in the Canadian company – which controls other mines besides Kumtor).

Besides Kumtor, the country has several large gold projects which are either being developed now (Ishtamberdy: Chinese-owned), or are at the mine construction stage (Chinese-owned Taldy-Bulak Left Bank; Chaarat, owned by an AIM-listed BVI corporation, Chaarat Gold Holdings Limited), or are at an early production stage (Jerooy - developed by Alliance-Altyn, a Russian-owned venture).

Distribution of licenses for large strategic gold deposits is done exclusively through tenders organized by the Government of the Kyrgyz Republic. Having burnt their fingers on dealing with unqualified speculators in the past years, the Government now accepts applications only from well-capitalized experienced mining companies. We consider that this is absolutely fair.

In Kyrgyzstan there is a certain number of medium size gold deposits (2-10 tons in reserves, for hard rock). Their profitability without further exploration and increase of reserves is a disputable matter, because the cost of building the benefication plant and all the infrastructure may kill all the potential profit (there are a few exceptions). Investors put their money into such projects usually in hope that further exploration will yield a good increase in reserves. This makes sense: during the Soviet times many of such deposits were not sufficiently explored.

A separate category of gold projects in Kyrgyzstan are gold placers. This is a peculiar category: if profitable production of gold from hard-rock deposits starts from the content of 2-3 grams per ton, placers may be profitable even when the content is 0,2 – 0,3 grams per cubic meter of sands. Chemical reagents are not required for benefication (mechanical processes are used), and the investment needed to launch a gold placer project into production are times lower than with a proper hard-rock mine: 300-500,000$. Reserves starting from 20-30 kilos of gold per prospect can make economic sense, when the same figure for orebody gold would probably be in single tons.

The main challenge in recovering gold from placers in Kyrgyzstan is very low content and tiny size of the gold particles. Nuggets are practically unknown in Kyrgyzstan; those which are found are smaller than a one cent coin. The other challenge is a relatively small size of placer deposits: licenses with reserves exceeding 200 kilograms are rare which means that the mining company focusing on placers must constantly look for new targets to maintain production.

The potential to discover new gold deposits (hard rock or alluvial) in Kyrgyzstan does exist, but to evaluate its chances, please consider the following.

Throughout the territory of what is now the independent Kyrgyz Republic, the Soviet Union for many years was intensively prospecting for Uranium, and with much success. As a consequence, the territory of Kyrgyzstan had been well surveyed with at least regional-scale exploration during the Soviet days. When they prospected for Uranium, they assessed all other mineral occurrences too.

This means that the chances of discovering a yet unknown large gold deposit in Kyrgysztan are not so big. Maybe it is 'hiding behind' an underexplored deposit, and maybe not. Of course, the geological potential to find larger deposits in the country exists, and any geologist will gladly tell you that (geologists generally love to talk with investors about 'potential' and 'perspectives'). From the commercial standpoint, though, investment of significant capital into prospecting for a new large goldfield in Kyrgyzstan most probably carries an unjustified risk.

A full-scale exploration of a gold deposit with reserves of gold (emphasis on 'reserves', meaning the real gold and not the vague expectation that it might be there somewhere) of over 30 tons would cost 20-30 million dollars at least. The prospecting phase will require a very small fraction of that amount, but the proper exploration (wells, shafts etc.) will be most costly. Only when the company certifies reserves of the deposit it may talk about the commercial potential of profitable production.

Oil and Gas

In Kyrgyzstan almost all the explored oil reserves are located in the Fergana Valley and slightly southwards. In fact, Soviet Kyrgyzstan "received" only a small fraction of the Fergana basin petroleum reserves, while their bulk is located in the neighbouring Uzbekistan whose territory includes the main part of the Fergana Valley.

Most of the Kyrgyz oilfields are in their final stages of production and the yield of the wells is constantly declining. In an attempt to intensify the yield, the State-owned KyrgyzNeftegaz which controls the bulk of the oil production in the country has engaged a number of foreign service companies to perform hydraulic fracturing and other 'deathbed manipulations' with the oil wells.

Besides KyrgyzNeftegaz, a number of private oil companies are active in the Fergana Valley and the southern provinces of Kyrgyzstan, several of them foreign-owned. However, their achievements are even poorer than those of the State-owned oil company. They 'torture' the wells drilled in the times of the Soviet Union not even attempting to discover new deposits.

The oil industry (if one can call it that) can in no way solve the problem of Kyrgyzstan's dependence on foreign oil and fails to supply enough raw product for the country's refineries. As a result, petroleum products including gasoline are an important item on the Kyrgyz Republic's import list.

Kyrgyzstan's total reserves are 10 million tonnes of oil and around 5 billion cubic metres of natural gas which is roughly equivalent to the reseves of a single mid-size Siberian oildfield.

From the geological point, the discovery of significant new reserves in Kyrgyzstan may be a viable idea.

Practically all the intermontane basins and valleys in the country have the potential to contain large reserves of hydrocarbons.

In the past 20 years a number of companies undertook early-stage exploration in several of those areas, but it was done so sluggishly that no promising results were achieved. A company with Chinese capital drilled two parametric wells in the Alay valley (Alay intermontane basin) which most likely proved to be dry (no results reported). Several companies acquired exploration licenses in the Chui Valley but their exploration program hardly even reached the seismic stage.

A Chinese-backed company acquired a license to explore for oil on the bottom of the Issyk Kul lake but never started works. Which is good news because no hydrocarbon reserves may be found there for geological reasons, and the exploration could have only damaged the lake's resort area.


Kyrgyzstan has significant reserves of coal (over a billion tons in general). Its quality varies, ranging from poor brown coal to coking. The problem, however, is the lack of a viable export transportation route.

Many coal deposits were explored by the USSR: in the very south (Sulyukta - The Batken Region), near Osh (Uzgen basin), further north near Tash Kumyr and in the Central Tien-Shan (Kara-Keche mine in the Naryn Region).

The Soviet Union planned to build a coal power plant at the Kara-Keche mine (to balance the hydro power supply in the low-water years), but the Communist empire collapsed before the plans could materialize.

As a result, the coal business in Kyrgyzstan now is the domain of small producers whose market is mainly municipal power stations and retail customers buying coal for heating. Some coal gets exported into the neighbouring Uzbekistan but the volume is not significant.

From time to time Chinese companies engage the Government of the Kyrgyz Republic in discussions of allowing them to build a railway linking China with the coal-rich regions of Kyrgyzstan. Construction of such a railway would immediately open up the Chinese market to the Kyrgyz coal. The current government of Sadyr Japarov seems positive about taking this forward, and it is expected that by the end of 2022 a feasibility study will be completed.

Besides acquiring key coal fields in anticipation of the Chinese market opening up via a newly built transport route, a potentially good investment opportunity in coal is producing half-coke from the coal found in the Kyrgyz South to supply it to Uzbekistan’s plants where a program of switching from natural gas to coal is being considered. Interstan Securities has some advanced understanding of this opportunity and is willing to discuss it with investors.


The Soviet Union successfully explored and developed to depletion most more or less significant Uranium properties in the country. A good deal of atomic bomb charges for the Soviet military was made of the Kyrgyz Uranium.

At present the Soviet Uranium mines are in conservation, and from the investment point of view are hardly of interest, unless a workable technology is found to reprocess their tailings and dumps (please see below).

New Uranium exploration and mining has been banned by law in 2019 as a by-product of an unrelated political struggle. It is now illegal to explore for Uranium or produce it.

Should this policy change, investors may consider only a few untapped Uranium prospects in Kyrgyzstan.

The biggest ones are - one in the Sary-Jaz river valley (hard rock deposit containing reserves plus resources = 9.5 thousand tonnes with an average Uranium content of 0,022%), and one in the East of the country - the Kyzyl-Ompul Uranium-Thorium alluvia (12.8 thousand tonnes of Uranium with an average content of Uranium of 0,032%).

In the Chui Valley, not far from the Manas airport, there is a promising Uranium underground deposit, however because of its location within fertile agricultural land we are very skeptical of its development potential - it will be virtually impossible to agree with the local residents for it to even be intensively explored, let alone mine.

The problem with the Kyzyl-Ompul alluvia is the presence of Thorium which is more toxic than Uranium and requires specialized equipment for processing. Kyrgyzstan does not have it, not even at the Kara-Balta plant which was used to process Uranium ores.

Tailings and Dumps

In the Soviet years Kyrgyzstan accumulated a significant volume of tailings from the processing of various ores. There are huge fields of rock-hard tailings from Uranium processing around the Kara-Balta Uranium Processing Plant about 100 km westward of Bishkek. Similar Uranium tailings surround the town of Maili-Sai in the South-West. There are dozens of tailings left from the production of gold, rare earths, mercury, antimony etc. Almost all of them still contain potentially valuable elements, but their content is by definition small.

These tailings and dumps wait for the arrival of a miner able to find the technology to economically extract the useful minerals.

There were attempts to do that already. An Australian public company Nimrodel Resources obtained licenses for the tailings and dumps of Maili-Sai, but failed to do anything with them apart from issuing several optimistic press-releases for its investors (the company closed its Kyrgyz presence several years ago and changed its name to Walkabout Resources). There were attempts to work over the tailings of the Kara-Balta plant, but the technology to extract residual gold did not test successfully. Chinese investors are now attempting to extract several tons of gold from the tailings of the Makmal gold mine in Central Kyrgyzstan.


Combined reserves of Antimony in Kyrgyzstan are around 264 thousand tonnes, contained in seven deposits, two of which are quite large (Kadamzhay and Khaidarkan).

The benefication of the Kyrgyz Antimony ores is complicated (Arsenium is present and the ores are oxydized). Development of this business in Kyrgyzstan awaits the introduction of new technologies.

The Kadamzhay Antimony Plant is working mainly on the raw material from Russia, with very unstable shipments.

Rare Earths

The Soviet Union successfully developed a number of rare earths deposits on the Kyrgyz territory. However, at present there are no actively producing projects in this mineral category.

Around a decade ago Stans Energy, a publicly listed Canadian miner, invested into the rehabilitation of the Kutessay-II mine where certain reserves were left over from the USSR production. However, the project was frozen following the company's conflict with the Kyrgyz Government. Stans Energy ultimately won compensation in a protracted arbitration but failed to get back the mining licenses.

What else do we have here

Tungsten, Tin, Beryllium, Aluminum, Copper, Lead, Zinc, Iron - there are good quality deposits of these minerals in Kyrgyzstan. Some of them are licensed and some are yet to be auctioned off.