Kyrgyz crowd attacks Australian gold miner's office

Reuters News
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Posted: Oct 18, 2013 10:14 AM

By Dmitry Solovyov

ALMATY (Reuters) - A crowd of about 200 people on Friday attacked the local office of Z-Explorer, an Australian company developing a gold field in southern Kyrgyzstan, in what appeared to be another violent conflict over the privatization of the country's resources.

A subsidiary of Australian-listed Manas Resources, Z-Explorer discovered the Shambesai deposit in 2010 and this year received a license to develop the field, which holds estimated gold reserves of 8.8 tons.

A bulldozer on its way to the deposit on Friday was met by an angry crowd, Jyldyz Akmatova, public affairs officer for Z-Explorer, said from the Kyrgyz capital Bishkek.

The swelling crowd later moved to the company's office in a nearby village and ransacked it, looting computers and other equipment, and burning seized documents, she said.

"They said they feared that our works could damage the environment and harm water supplies and their orchards," Akmatova said, but expressed the company's opinion that the real reason for the violence was probably political.

"Z-Explorer expresses its concern over this incident, in particular, over the participation of some deputies of the local council in these unlawful actions, which undermine trust in state power and have a negative impact on attracting investment," Z-Explorer said in a statement.

The local police confirmed the incident had taken place, but none of the protesters or the government could be reached for comment.

Violent riots over ownership of the country's flagship venture - the Kumtor gold deposit in the Tien Shan mountains - flared up last week when protesters in the northern town of Karakol took the local governor hostage and threatened to burn him alive. Police were later able to free the official.

Last month the government signed a memorandum of understanding with Canada's Centerra Gold paving the way for Kyrgyzstan to swap its 32.7 percent stake in Kumtor, Centerra's core asset, for a 50 percent interest in a joint venture that would own the mine.

The opposition demands that Kyrgyzstan's share be boosted to at least two-thirds or Kumtor should be nationalized, or it will call for a no-confidence vote in the government.

Kyrgyzstan, a mainly Muslim nation of 5.5 million which hosts both U.S. and Russian military air bases and lies on a drug trafficking route out of Afghanistan, has seen two presidents deposed in bloody revolts since 2005.

The Central Asian nation is one of the poorest among the 15 post-Soviet countries, and violent attacks on investors and official buildings across the nation have exposed the power of local clans and tenuous control of central government.

Shambesai is smaller than Kumtor, which was discovered by Soviet-era geologists. But it has symbolic significance for the Kyrgyz people, as it was the first gold field discovered after independence in 1991.

(Additional reporting by Olga Dzyubenko in Bishkek; Editing by Sonya Hepinstall)