The Kyrgyz Republic has substantial deposits of coal and gold. Oil and gas reserves, on the other hand, are very limited. With 18.5 tonnes of gold produced in 2011, gold mining remains essential for the Kyrgyz economy. Kumtor, the largest gold mine, accounted for half of industrial output and approximately 12 percent of GDP in 2011. It is also Kyrgyzstan’s largest employer with over 3,000 employees. The Kumtor mine is run by the Canadian company Centerra, and the Kyrgyz state has a stake in it. Ownership restructuration of the Kumtor mine is under consideration.
According to the 2011 EITI Report, mining constituted about 15% of budget revenues, about 15% of GDP and 53% of total volume of exports for the Kyrgyz Republic. Lack of infrastructure and investment is hindering the exploitation of coal, tin and tungsten deposits.
The government is attempting to improve the business climate to attract foreign investment. It aims to increase revenues from the extractive industries through diversification of the sector and integration into the world economy. (Source: National Sustainable Development Strategy.) Relations with China have intensified in recent years, and there are plans to construct a pipeline transporting Turkmen gas from Kyrgyzstan to China.
Implementation activities in Kyrgyzstan are currently focused on finalsing the 2012 EITI Report which is due to be published in Q1 2014. As in previous years, this report will contain some contextual information about the extractive industry, including production volumes and information about extractive industry licenses. Building trust between government, companies and civil society is a key issue in Kyrgyzstan. A summary 2011 EITI Report has been produced to better explain the revenues from the sector and how the sector works. The NGO Three of life also hosts an online forum for discussing natural resource governance, including EITI.
On 23 December 2013, the KEITI Supervisory Board adopted the 2014-2015 workplan. The workplan forsees a number of new activities including monitoring local extractive industry funds for development, monitoring the use of resources allocated for environmental protection, contract transparency, beneficial ownership, reviewing the allocation of licenses, reporting on the indirect contributions of the mining sector to the economy, and establishing a reporting mechanism for transparency in the use of extractive industry funds allocated for infrastructure investments.
In June 2011, the government of the Kyrgyz Republic decided to establish the Fuel and Energy Sector Transparency Initiative (FESTI), partially modelled on the EITI. FEISTI aims to increase transparency and accountability in the energy sector. It has its own Supervisory Board and a secretariat located within the Ministry of Energy.
The EITI Reports include payments to the social fund and environmental charges.