Major Economic Sectors

Industries: small machinery, textiles, food processing, cement, shoes, sawn logs, refrigerators, furniture, electric motors, gold, rare earth metals.

Agriculture products: tobacco, cotton, potatoes, vegetables, grapes, fruits and berries; sheep, goats, cattle, wool. The main agricultural regions are in the Fergana Valley (Osh and Jalal-Abad provinces), in the northern Chu and Talas valleys, and in the Issyk-Kul basin in the northeast.

Exports commodities: cotton, wool, meat, tobacco; gold, mercury, uranium, hydropower; machinery; shoes.

Imports commodities: grain, lumber, industrial products, ferrous metals, fuel, machinery, textiles, footwear

Mineral recourses and mining: Kyrgyzstan’s wealth of mining opportunities is good news for western countries already operating in that country and is attracting a growing number of Canadian companies who are interested in doing business there. They include Centerra Gold, which owns the country’s Kumtor gold mine. To date, Kumtor has produced more than 7.2 million ounces of gold. Another success story is Stans Energy KG, which owns a past producing Rare Earth mine and just acquired a Heavy Rare Earth Element (HREE) processing facility in Kyrgyzstan that produced 80% of the former Soviet Union REEs – the only HREE production facility of this scale outside China.

The Kyrgyz for gold is “Altyn”. It is used as a name and KyrgyzAltyn is the main, government run, company working in gold extraction.

Gold is found in many deposits around the country. The countries of the former USSR now constitute the world’s second largest producer, with production of 300 tonnes a year (about 10% of the world’s total production).  Most of this comes Russia – about 200 tonnes, and Uzbekistan is the second largest producer with about 60 tonnes a year. Kyrgyzstan currently produces about 20 tonnes a year – although there are plans to increase this.

The main deposit is the Kumtor mine, which is one of the largest deposits in the world and is operated by a Kyrgyz-Canadian joint venture – with an estimated 11 million ounces of gold. Indeed, gold was so important for the economy of the Kyrgyz Republic, that for the period immediately after independence it represented virtually all the foreign currency earnings of the new country, and some economic statistics were (and still are) quoted in two forms – for example: GDP and “GDP (without Kumtor)”.

Further expansion is planned with, for example extraction beginning at the Central Kyzylkumah mine, which should bring over 6 tonnes of gold per year.  Other local deposits – Makmal, Tereksay, Solton-Sary – should produce more than 2 tonnes of the metal per year. The management of Kyrgyzaltyn are also considering creating another Joint Venture with investors from Finland or China, which would provide additional production of over 1 tonne per year.

Licenses have been issued to a number of other companies to investigate and develop other goldfields around the country.

The rules concerning gold production have been relaxed in recent years and now private individuals can prospect for gold and are allowed to sell their finds directly to the market and several prospecting collectives have grown up around the country. You can find examples of jewellery made from Kyrgyz gold in many of the jewellery shops in all over the world.

The Kyrgyz Republic is rich in mineral resources and mining is an important part of the economy. All of the elements in the elementary table are to be found in the country – but access to them is not always easy.

Lead, zinc and “rare earth metals” are mined, but deposits of sulphur, arsenic, iron, aluminium and other metals have yet to be exploited.

There are large deposits of ornamental stone which can be used for construction – marble, granite etc. Ceramics, silicon, for the semi-conductor industry are also mined.

The Chon Tus salt mine near Kochkor was used for many years to produce salt – mainly for agricultural purposes, and still does, although it is mainly used now as a sanatoria for treating allergies and other ailments.

Mercury is the second most commonly found element in the Kyrgyz Republic.  Deposits are found in the form of a large belt, 5 kilometers deep, from the Leilek river in the East to the Uzengikuch River in the West – stretching over 1000 km.

Mercury and Antimony is produced at a number of mines – most notably the Khaidarken mine. Kyrgyzstan satisfies 6-10 % of the world’s needs in mercury. The mine is considered to be unique in that it is completely oriented to exporting its product – mainly due to the fact that it is located next to one of the largest world purchasers of mercury – China. “Pure” mercury is produced only in Kyrgyzstan, China, Spain and Algeria. These four countries account for about 60 % of the market’s needs. The remainder comes from other countries, which produce mercury during the extraction of other natural deposits. The mine has suffered, however, from a downturn in world demand

It is estimated that there are something like two and a half billion tons of coal reserves in the country – and annual production is about currently about 300,000 tons a year. One of the bigger open cast mines is at Kara Keche on the northern approaches to Lake Son Kul. It is planned to extend the railway from Balykchi to Kara Keche to enable transportation of the coal which will have an important effect on export potential.

There are also deposits of “brown coal” in the South of the country – in the Fergana valley.

There are small oil and natural gas deposits in the south of the country. Currently the reserves are estimated at about 400 million tonnes and about 8 million tonnes are extracted annually. This is not enough, however, to supply the domestic market and much is imported.

The supply of natural gas from Uzbekistan is frequently interrupted over disputes about non-payment of debts and much petroleum and diesel oil is smuggled into the country.

Uranium is mined in various places but Kyrgyzstan is more important as a center for processing the mineral. There are plans to increase production, in particular in co-operation with Russia and Kazakhstan – ore from the Chui-Sarisu deposit in Kazakhstan will be shipped to the Kara Balta Mining Complex for processing and then transported to Russia.  Kara Balta currently processes about 450 tonns of ore a year – and operates at about 35% of it’s capacity.

Perhaps the greatest of Kyrgyzstan’s mineral resources is water – locked up in the glaciers and rivers. Many sources of mineral water and thermal springs can also be found throughout the country.

Central Asia is a dry and arid region with immensely diverse topography ranging from high mountains and glaciers to vast and dry steppes and deserts. The region is rich in water resources but more than 90 % are concentrated in the mountains of Kyrgyzstan and Tajikistan. As much as 40 % of the region’s water resources are concentrated solely in Kyrgyzstan.

The water resources on territory of Kyrgyzstan are allocated extremely non-uniformly and are concentrated basically in the not yet lived-in and economically underdeveloped areas. From common stocks of river waters – 46,8 km3 – only 10 % is used in republic, others 90 % leave for its limits. On the average on 1km2 of the area of Kyrgyzstan it is necessary 236 thousand m3 of water per one year. Most supplied is Naryn area, where the water stocks on 1 km2 on the average make 408 000 m3. Issyk-Kul kettle (area of depression) on the average year receives 102 000 m3 on 1 km2 of the area. In Chu to a valley and Osh area, where 78,8 % of the population of republic are concentrated, 49,8 % of total size of water resources settles down only. Batken and some areas of Chu and Talas of valleys, and also western part of Issyk-Kul kettle (area of depression) concern to least water maintenance to areas of republic.

Water resources are strategic, vital natural resources having interstate importance. Kyrgyzstan has huge resources of ground and surface waters, the significant stocks of which are in the rivers, eternal ice-houses and snow massifs.

Kyrgyzstan’s major energy source, water, has also been discussed as a commercial product. The export of bottled mineral and fresh water was the object of several plans which can be realized in nearest future.

© 2014 Embassy of Kyrgyz Republic in New Delhi, India