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Chinese Mining Company Affected by Protests in Kyrgyzstan Has Ties to Major SOE

12/03/20 6 minute read

Work came to a halt last month at Full Gold Mining LLC, a Chinese-owned mining company located in Kyrgyzstan after protesters stormed its facilities following the country’s October 4 parliamentary elections. Full Gold Mining has connections to a large Chinese state-owned enterprise involved with China’s Belt and Road Initiative and has come under fire in the past over allegations of worker mistreatment.

Protests in Kyrgyzstan

Following the parliamentary elections on October 4, protests erupted across Kyrgyzstan, with protesters alleging election fraud. The Central Election Commission of Kyrgyzstan annulled the election results on October 6 and on October 15, Kyrgyz President Sooronbay Jeenbekov resigned.

During this period of unrest, protests — which had originally been centralized in Kyrgyzstan’s capital Bishkek — spilled into smaller villages and towns, as well. While the primary focus of these protests was the election results, many also capitalized on frustrations stemming from the presence of foreign-controlled companies in Kyrgyzstan.

Locals in Kyrgyzstan have long expressed grievances with large international mining companies that use local labor and have been accused of mistreating workers, withholding shares of earnings, as well as harming the environment.

One of these mining companies, Full Gold Mining LLC, is located in Ala-Buka, in the Jalal-Abad region in Kyrgyzstan, where it has a 20-year license to develop the Ishtamberdy gold deposit. Full Gold Mining’s mining operation was stormed by protesters as part of the nationwide unrest following the elections.

Alleged Discriminatory Practices and Potential Chemical Hazard of Full Gold Mining

The relationship between Full Gold Mining’s operation in Ala-Buka and the local population has not been smooth. Throughout the company’s existence, there have been multiple controversies stemming from allegations of environmental harm and mistreatment of employees.

Earlier this year, residents of Sumsar, a village located in the Ala-Buka region, stopped two trucks carrying what appeared to be chemical waste for disposal at a nearby dumping site. Kyrgyzstan’s State Inspectorate for Ecological and Technical Safety (GETI) claimed that the waste belonged to Full Gold Mining, according to local media.

When questioned by locals, the drivers were not fully informed as to the specific contents of the trucks, leading to concerns that those contents included hazardous waste.

Following the incident, GETI launched an investigation to determine the harmfulness of the chemicals, as well as the legality of their disposal in Sumsar.

This was not Full Gold Mining’s first run-in with the state over environmental concerns.

In 2019, a government inspection of Full Gold Mining determined that the company was in violation of environmental laws. The type of violation was not disclosed, and the results of an investigation into the incident are still pending.

In addition to the environmental concerns surrounding the company, Full Gold Mining has also come under fire for its treatment of local employees in Kyrgyzstan.

In 2018, the Chinese firm tried to significantly cut down the wages of its Kyrgyz workforce citing ongoing financial difficulties, according to local media. Full Gold Mining then dismissed 370 Kyrgyz miners claiming that they had refused to accept the amendments to their contracts.

Full Gold Mining and China Road and Bridge Corporation

According to Kyrgyz public records in Sayari Graph, Full Gold Mining has a director and three shareholders. One of those shareholders is the China Road and Bridge Corporation, a major Chinese state-owned enterprise with ties to multiple sanctioned entities.

China Road and Bridge Corporation maintains branch offices and subsidiaries in dozens of countries, according to Chinese public records in Graph. Chinese state-run media claims that the company has worked on multiple large road projects in Kyrgyzstan as part of Beijing’s increasing investment in Central Asia.

Fig. 1: A Sayari Graph snapshot of China Road and Bridge Corporation’s network outlining branch offices and subsidiaries in dozens of countries.

As a result of the Belt and Road Initiative (BRI) a China-led, global infrastructure development policy, China is Kyrgyzstan’s biggest investor. Between 2006 and 2017, China’s foreign direct investment “inflow was equal to $2.3 billion” and “constituted 25-50% of total foreign direct investment to Kyrgyzstan, equivalent to 2-7% of the country’s GDP,” according to a report by the University of Central Asia in Bishkek.

Currently, China Road and Bridge Corporation is building the North-South Alternative Road, a $1 billion project funded by loans from the China Export-Import Bank, which will connect major cities in Kyrgyzstan that are bordered by mountains.

Despite reports of locals in Kyrgyzstan being treated unfairly by Chinese corporations, as well as a steadily increasing anti-Chinese-corporation sentiment on the ground, Chinese state-run media continues to outline these activities and investments in Kyrgyzstan in a very positive light. Last month’s protests, however, seem to indicate different circumstances.

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