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Kyrgyzstan's Kumtor Gold Mine And The Fall Of A 'Great Nomad'

A Kumtor mine worker during a visit by members of a government commission and Akylbek Japarov, head of the Kyrgyz cabinet of ministers, in January.
A Kumtor mine worker during a visit by members of a government commission and Akylbek Japarov, head of the Kyrgyz cabinet of ministers, in January.

BISHKEK -- A photo circulating online in November showed three of Kyrgyzstan's most powerful officials: the prosecutor-general, the chairman of the State Committee for National Security (UKMK), and the prime minister enjoying a meal with their families.

Joining them was Tengiz Bolturuk, the man appointed the external manager of the giant Kumtor gold mine after authorities seized it in May 2021. He was also the head of a new, ambitious state holding called Heritage of Great Nomads that oversaw the mine.

While the exact date of the photo is unknown, it was a reminder that before his arrest in September, Bolturuk ate at the top table.

But now that table has turned on him.

Both the Prosecutor-General's Office and the UKMK participated in the investigation into alleged financial impropriety at the mine that led to Bolturuk's detention.

Tengiz Bolturuk sits in court in Bishkek in September 2022.
Tengiz Bolturuk sits in court in Bishkek in September 2022.

Kyrgyz President Sadyr Japarov, widely viewed as Bolturuk's promoter, washed his hands of the man that spearheaded Kumtor's nationalization, while dismissing the claims of opposition politicians that top politicians had partaken in corruption in league with Bolturuk.

"If we had stolen gold then, on the contrary, we would have let him escape abroad, and [only afterward] reveal him as a thief," Japarov said in an interview with the Kabar state media outlet in November.

"Let the investigation end and the amount of damages will be established. Let him reimburse all the damage. We have such a principle, because this is the wealth of the people. After that, let's see," he added.

An RFE/RL inquiry to the presidential administration for comment did not receive a response.

The arrest came amid growing fears about the management of Kyrgyzstan's most important economic asset since the nationalization that Japarov had claimed as a major political victory.

"Just like his appointment, his arrest raises a lot of questions, questions that haven't been answered yet," Dinara Oshurahunova, an anti-corruption and rights campaigner in the Kyrgyz capital, Bishkek, told RFE/RL.

"There was surprise that a close ally of Japarov was arrested. But some people saw a maneuver to deflect some of the criticism that was building. People were asking where the gold had gone and why it had not solved all our economic problems," she said.

Last week, Kyrgyzstan's Chamber of Accounts released a report detailing dozens of transgressions perpetrated by Bolturuk and Heritage of Great Nomads that investigators argue have cost the state budget around 1 billion soms (about $11.5 million).

Workers at the Kumtor mine
Workers at the Kumtor mine

The report found that the company had spent $2 million from the state budget buying furniture for Kumtor's operating company, Kumtor Gold Company, while the same company had begun renting an office three times as expensive as its old one.

Accusations about corruption in food and fuel contracts for the gold mine were made earlier, when prosecutors first pressed charges against Bolturuk.

Bolturuk's lawyer called the report an "artificial creation" and defended his client's record of cost-cutting at Kumtor, noting that authorities were ignoring an audit carried out by Ernst & Young that had given Kumtor's 2021 accounts a clean bill of health.

'Another Source Of Rent'

As well as an outsized contributor to a poor economy, Kumtor had long been a source of public anxiety, environmental concerns, and political fights in Kyrgyzstan.

For populist Japarov and his ally Kamchybek Tashiev, the head of the UKMK who appeared in the photo with Bolturuk, the gold mine's nationalization had been a political goal since at least a decade ago, when the pair were still in opposition.

Sadyr Japarov (right) and Tengiz Bolturuk visit Kumtor on January 2, 2022.
Sadyr Japarov (right) and Tengiz Bolturuk visit Kumtor on January 2, 2022.

At the time of the political crisis in 2020 that catapulted the two men to power, Japarov was serving out a jail sentence on charges related to a 2013 rally near the gold mine that had seen a regional governor briefly kidnapped by protesters.

Japarov's nearly overnight transition from prisoner to president took even seasoned analysts of Kyrgyz power struggles by surprise. The bid to bring Kumtor under state control began not long after he cemented power with an election in January 2021.

Prior to the state raid on the mine situated 4,000 meters above sea level, authorities had laid out accusations of gross environmental mismanagement and safety violations.

These formed a pretext for imposing "external management" on the mine, with Bolturuk -- formerly a government representative on Centerra's board -- filling the role of external manager.

Centerra, which had already filed for arbitration against Kyrgyzstan, added legal proceedings against Bolturuk for what they said was a conflict of interests.

A section of the Kumtor gold mine in May 2021
A section of the Kumtor gold mine in May 2021

All of those claims were dropped in an amicable divorce between the government and Centerra that was reached last year.

But in Kyrgyzstan, Bolturuk was amassing distrust, partly due to his Canadian citizenship, which was raised in parliament.

Then there was Heritage of Great Nomads.

In a discussion on RFE/RL's Majlis podcast in September, political scientist Asel Doolotkeldieva reflected on interviews that she had conducted with mining sector employees who had been laid off as a result of the new company's rapid expansion across the sector.

"Why do we need this new institution -- with interests not only in mining, but in industry and tourism -- when there are other institutions that already exist in its place?" Doolotkeldieva asked.

Industry sources viewed Heritage of Great Nomads and other newly created holdings as being "owned by networks" around Japarov that aimed to "take over all these projects [and use them] as another source of rent," Dooletkeldieva told the Majlis podcast.

Short-Term Gains, Long-Term Questions?

Details from the Chamber of Accounts report certainly suggest that Heritage of Great Nomads and its manager had a broad remit.

Among more than 30 projects that the company received public money for but never fulfilled were renovations of a sanatorium and a ski resort in the Issyk-Kul region -- where Kumtor is located -- as well as the construction of a five-star hotel and a marble factory, the chamber has alleged.

One official to benefit from largesse at the time the company oversaw the mine was Environment Minister Dinara Kutmanova, who was given a Toyota Land Cruiser worth more than $60,000, according to the report.

Dinara Kutmanova
Dinara Kutmanova

When Kumtor was controlled by Centerra, Kutmanova was one of its loudest critics.

The minister has said the jeep was not for personal use but to conduct site inspections at the mine. The Chamber of Accounts has said it and other vehicles handed out must be returned to Kumtor.

Finance Minister Almaz Baketaev said in parliament in December that Heritage of Great Nomads will be shuttered and its funds returned to the budget, but claimed that taking care of the company's liabilities would cost some 700 million soms (about $8 million).

"Will someone be held responsible for what was created, what is being liquidated?" fumed awmaker Dastan Bekeshev, in response. "This all happened under one person."

Taking full control of Kumtor appears to have eased the Kyrgyz government's perennial cash-flow crisis.

Doolotkeldieva noted in the Majlis podcast that the period of state administration of Kumtor had coincided with increased state salaries and surprising infrastructure drives.

The Kumtor mine
The Kumtor mine

But the government remains secretive in terms of data.

In August, shortly before Bolturuk's arrest, Japarov gave an interview with state information agency Kabar in which he said that the destination of gold exports would not be revealed in the interest of security.

He also said that any panic over gold vanishing was unwarranted.

State companies Kyrgyzaltyn, Kumtor Gold Company, and the National Bank would "answer with [their] heads)" if they couldnt account for every gram of gold that was mined.

According to official figures, Kumtor produced 17.3 tons of gold in 2022, almost three tons more than the previous year.

As pressing as the questions about transparency are, the questions about the longevity of a mine that began production as Kyrgyzstan's first major foreign investment in the 1990s are even more critical.

Aerial view of the Kumtor mine in 2011
Aerial view of the Kumtor mine in 2011

In a letter from prison last month, Bolturuk claimed Kumtor was suffering from a severe deficit of certain specialists and warned that the mine might have to stop work in 2025 due to a build-up in its tailings dam if significant actions aren't taken.

Kumtor Gold Company dismissed that possibility in a response to the letter and accused Bolturuk of using his time in charge to hire "expensive expats for fabulous salaries and fees" whom the company said had now been replaced by Kyrgyz specialists.

The letter was Bolturuk's "attempt to present himself as an indispensable worker, but as the time when Tengiz Bolturuk was the head of the company showed, he misused [the company] as well as Kumtor's funds," the firm said.

While there has been limited sympathy in Kyrgyzstan for the "scandalous" Bolturuk, few doubt that the process against him is political and possibly connected to high-level infighting, said Oshurahunova, the civil activist.

"The process is all very dubious. Bolturuk is somebody that knows a lot, who knows where the gold goes. If he committed crimes it is unlikely that others did not benefit from them," Oshurahunova argued.

Written by Chris Rickleton based on reporting by RFE/RL's Kyrgyz Service
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    RFE/RL's Kyrgyz Service

    RFE/RL's Kyrgyz Service is an award-winning, multimedia source of independent news and informed debate, covering major stories and underreported topics, including women, minority rights, high-level corruption, and religious radicalism.

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    Chris Rickleton

    Chris Rickleton is a journalist living in Almaty. Before joining RFE/RL he was Central Asia bureau chief for Agence France-Presse, where his reports were regularly republished by major outlets such as MSN, Euronews, Yahoo News, and The Guardian. He is a graduate of the University of St. Andrews in Scotland. 

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