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BISHKEK (TCA) — The Embassy of China in Kyrgyzstan has asked the Kyrgyz Foreign Affairs and Internal Affairs Ministries to conduct a fair investigation and protect Chinese investors, after hundreds of residents of the country’s Toguz-Torou district set several buildings of the Kyrgyz-Chinese joint venture Makmal GL Developing ablaze on April 11, 24.kg news agency reported.

On April 11, locals broke into the territory of Makmal GL Developing and set a gold-processing plant on fire near the town of Kazarman in the Toguz-Torou district of the Jalal-Abad province in the south of Kyrgyzstan. They did not allow the firefighters to extinguish the fire.

According to official reports, protesters burned two large KamAZ trucks, excavators, a mobile crane, containers, and an administrative building of the company. Three policemen were injured in the riots.

According to the company, $5 million worth of equipment was burnt.

Violent protest

The main reason for the protest was the fear of the environment violation if the plant starts operating. The protesters said that the company's management has not fulfilled their demands, and began to set fire to the buildings. According to some estimates, about one thousand protesters participated in the riot.

The protesters also threw stones at policemen and members of the Commission of the State Inspectorate for Environmental and Technical Safety, who arrived in Toguz-Torou to conduct outreach work with the local population.

After the incident, Prime Minister Sapar Isakov fired akim (head of administration) of the Toguz-Torou district Tilek Idrisov.

Next to the new plant, there is a Makmalzoloto plant which uses cyanide to extract gold. The new plant in Kazarman planned to extract gold using modern ecologically friendly technologies without cyanides. The commission was to study the impact of the plant on the environment and then give its conclusion whether the plant will work or not. However, the commission could not complete its work due to the riot.

Prime Minister Isakov ordered the Ministry of Internal Affairs to conduct a thorough investigation into the arson of the gold-processing plant, stressing the inadmissibility of such actions of spoiling of private property. The Ministry has instituted criminal proceedings for disorderly conduct, deliberate destruction or damage to others’ property by arson, and mass riots.

The police fully control the situation in the region, the Interior Ministry reported.

Construction permitted

According to the State Inspectorate for Environmental and Technical Safety, Makmal GL Developing has permission to build a gold-processing plant, and only the environmental issue hindered the launch of the plant.

The company has not yet submitted the results of the environmental assessment, said Ulan Ryskulov, Chairman of the State Committee for Industry, Energy and Subsoil Resources.

After the assessment, the Committee planned to inform the local population whether the enterprise meets the environmental requirements or not. However, local residents, not waiting for the results, began to destroy the company’s property. It is not yet known who initiated the riots, but it looked like a preplanned action, because people came out with posters. The relevant authorities should investigate the case, Ryskulov said.

Background

According to official data, Maksat Jeenaliev (formerly vice-president of Kyrgyzaltyn state gold company) is the head of Makmal GL Developing. The founders are Kurandy Development LLC and Yan Weihong (China).

Makmal GL Developing began to build the plant in 2017. The enterprise was built to process ores and concentrates of precious metals received from local gold-mining enterprises. Such ores are currently exported to Kazakhstan and China due to the lack of processing enterprises in Kyrgyzstan.

The operating life of the plant is eight years. The project costs $30 million. At the first stage, $10 million has been invested in the construction of the plant.

The Toguz-Torou residents repeatedly demanded to close the gold-processing plant. The enterprise was suspended in February of this year after the protests of the local population.

MPs opinion

Chairman of the Parliamentary Committee for Fuel and Energy Sector and Subsoil Use, Kojobek Ryspaev, supports the construction of the gold-processing plant in Toguz-Torou. "If we continue this way, no investor will come to us," he said.

Earlier, some MPs initiated a bill to introduce a 25-percent duty on the export of gold-bearing ores from Kyrgyzstan, but in November 2017 the Parliament decided to postpone this initiative and to build a gold-processing plant in the country which would help increase revenues to the state budget.

The riot at the Makmal mine badly affects the international image of Kyrgyzstan, and the country bears economic losses, MP Aitmamat Nazarov said. Two months have passed since the last rally at Makmal, but no public hearings have been held while the authorities had to talk to the population and resolve the issue. It is useless to fire the head of the district only, but it is necessary to consider the responsibility of more high-ranking officials, he added.

Deputy Parliament Speaker Mirlan Bakirov advised not to rush to apply administrative measures against the Toguz-Torou residents. Local activists, through local deputies, repeatedly asked the Government and the investor company to provide all the necessary information, but they have not received an answer. As a result, protests took place while they could be avoided, he believes.

MP Azamat Arapbaev spoke in defense of the rights of investors at the parliament session. There were cases when subsoil users obtained documents necessary to develop deposits, spent their money and time, but were not allowed to work on the ground, he said.

In most cases, laws passed by the Parliament are not enforced on the ground. It is necessary to develop a new law on the relationship of subsoil users with local governments, he added.

Conclusion

Makmal GL Developing has the right to demand compensation for damages to the plant and machinery burned during the riot.

According to international agreements, the Government is obliged to ensure protection of foreign investments in Kyrgyzstan. Otherwise, investors have the right to apply to international arbitration.

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