Kyrgyzstan bans uranium mining while Central Asia countries strengthen legislation

Anastasia Bogdanova | January 17, 2020 | Views: 101 | Source: The Times of Central Asia

BISHKEK (TCA) — Kyrgyzstan has banned the development of uranium and thorium deposits, as well as the import of uranium-containing raw materials.

Since the beginning of 2020, the relevant law has entered into force.

Disputes over the anti-uranium bill, as well as the scandal over the development of the Kyzyl-Ompol uranium deposit in the Issyk-Kul province by YurAsia in Kyrgyzstan LLC was among the most striking events of 2019.

Background

Last year, a group of MPs drafted a bill banning the development of uranium and thorium deposits in Kyrgyzstan. According to the bill authors, the document was developed due to the demands of the population.

Residents of Kok-Moinok village in the Ton district of the Issyk-Kul province were against the development of uranium deposits located in their territory. The YurAsia in Kyrgyzstan LLC conducted exploration works at the Kyzyl-Ompol uranium field.

The locals feared the negative effects of uranium mining on the environment, as well as agriculture and tourism business.

At the meetings with local residents, the company’s representatives and independent experts repeatedly explained that uranium mining at Kyzyl-Ompol does not pose a threat to the environment and people’s health due to the safest technology, not involving the use of chemicals, explosions and tailings that pollute the environment. Extracted uranium in the sand should be shipped in special containers by rail for processing at the Kara-Balta mining plant in the Chui province. As a result, the radiation background at the field and in its surroundings will decrease, the experts said.

The YurAsia in Kyrgyzstan LLC was registered in 2004 and received an exploration license in 2011. Later, the license was renewed several times by the State Committee for Industry, Energy and Subsoil Use. The company is among of the largest taxpayers in the Issyk-Kul province.

Analyst opinions

At the end of 2019, leading business associations of the country including the Union of Entrepreneurs of Kyrgyzstan, Mining Guild of Kyrgyzstan, and Association of Mining and Geologists appealed to President Sooronbai Jeenbekov expressing high concern about the situation around the anti-uranium bill approved by the Parliament and sent to the President for signature.

The bill was adopted in a hurry and threatens the entire mining industry of the country, they said.

More than 80 large deposits can fall under this law because uranium and thorium are contained in many rocks as accompanying elements. These are not only all rare-earth metals, but also coal deposits, including gold, copper, granite, and marble ones.

Some experts warn that with the introduction of this law a financial crisis awaits the country. In their opinion, the law will have a negative impact on the investment attractiveness of the country.

The law is more harmful than positive for the country, independent expert Alik Januzakov said at a press conference in Bishkek. The negative impact of uranium in Kyzyl-Ompol was not recorded either in the air, or in the ground, or in water. But with the adoption of the law hundreds of deposits will be closed and the lost profit of the developers will be $4 billion, he added.

Attempts of the State Committee for Industry, Energy and Subsoil Use to soften the bill by excluding the ban on the development of thorium deposits were also unsuccessful. Such a restriction will not allow attracting investments in the development of rare earth deposits while the demand for them is growing due to the introduction of high-tech production.

Abandoning promising prospects

There is no reason to be afraid of an economic crisis after the ban on the extraction of uranium and thorium in Kyrgyzstan, but the country has abandoned the prospects of extracting strategic energy raw materials, expert Kushbakali Tajibaev told Vesti.kg news agency.

One kilogram of enriched uranium contains the energy equivalent of 100 tons of coal. During the bill’s discussions in the Parliament, Tajibaev proposed to ban at least for 50 years. In the future, more environmentally-friendly system for using atomic energy could be developed, he explained.

There are a lot of nuclear power plants in the world, and for Kyrgyzstan, this would also be a promising area, the expert believes.

According to the World Nuclear Association, “the prospects for new reactors in many countries have improved with several newcomer countries such as Turkey, Bangladesh and Egypt launching construction projects and several more, including Uzbekistan, Kazakhstan and Poland, demonstrating a clear interest in developing nuclear programs.”

However, the MPs did not support the expert.

As for the Kyzyl-Ompol deposit, radiation cannot be avoided even if its development is banned, because the uranium is located too close to the surface. Experts proposed to take away uranium raw materials in containers and enrich them elsewhere.

Currently, Kyzyl-Ompol is the only large uranium and thorium deposit in the country. There are 3.5 thousand tons of approved reserves. Based on forecasts, there may be about 12 thousand tons. At other deposits, there are approximately 650 tons total.

To determine forecasted reserves, the government needs a lot of money. Since deposits are scattered throughout the country and their reserves are scanty, it is not economically feasible to conduct geological studies there, experts concluded.

Losses and possible claims

Due to the ban on uranium mining, a number of mining companies may file multimillion-dollar lawsuits against the Kyrgyz government.

Investors who previously signed agreements with the Kyrgyz authorities and invested considerable money in research works and preparation for extraction and processing are unhappy with the uranium ban.

Since 2012, the YurAsia in Kyrgyzstan has invested over 271 million soms in exploration, not to mention taxes to the Social Fund, payment to local administrations and fees for license retaining.

The investor of the Kara-Balta Mining Plant is preparing documents for a lawsuit. Udox Investment Inc, a company registered at the British Virgin Islands, is the main shareholder, which owns more than 90 percent of the shares.

The plant has debt and investment obligations. It was planned that the raw materials extracted from the Kyzyl-Ompol deposit would be exported to the enterprise for processing. According to official data, the plant will not receive a total of $70 million in profit, and the national budget will not get 500 million soms of taxes.

The ban on the import of imported uranium-containing raw materials and the processing of local raw materials leads to the shutdown of the enterprise.

Revising agreements

Such incidents between the state and investors increase investment risks and adversely affect future projects. Various studies show that Kyrgyzstan traditionally belongs to the field of risky investments due to numerous revisions of previously concluded agreements with foreign investors.

Kyrgyzstan differs from other countries in the region in that its population influences decisions that have already been made, and this applies to most of the country’s major mining projects, Professor of Kazakh-German University Rustam Burnashev told StanRadar.com. The ban on uranium mining was imposed after a series of rallies in Bishkek and shares on social networks.

In Kazakhstan and Uzbekistan, the possibility of such incidents is extremely limited, he said. If there was some pressure on investors, it was of state origin and did not extend to rallies, as it was in Kyrgyzstan.

Not to ban but give directions

In Kyrgyzstan, it would be better not to ban the development of uranium and thorium, but to introduce restrictive measures and strict regulations, experts say.

First of all, it is necessary to modernize the legislation, according to which the companies would be fully responsible for the safety of uranium mining, renowned geologist Valentin Bogdetsky said.

It is worth turning to the experience of neighbouring countries. Recently, a draft law on amendments to legislative acts on the use of atomic energy was submitted to the Mazhilis (lower house of Kazakhstan’s Parliament). The bill is aimed at improving the legal mechanisms for the development of nuclear energy and ensuring its safety.

Uzbekistan, one of the top ten uranium producers in the world, intends to increase uranium production by creating a joint venture for exploration and production of uranium with the French company Orano Mining S.A., the press service of the Uzbek State Committee for Geology and Mineral Resources reported.

There are many uranium-containing deposits in Kyrgyzstan, but the population does not even suspect about them, expert Alik Januzakov said. Until 1994, all information about radiation was classified as secret. The state should regulate these issues and warn about hazardous areas in which agriculture should not be practised. The task of the state is regulatory — not to ban but give directions.

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