Former mining chief arrested in Kyrgyzstan

By bne IntelliNews December 4, 2012

bne -

The former head of Kyrgyzstan's state mineral resources agency has been arrested on corruption charges, as the government continues its efforts to clean up the mining sector.

Uchkunbek Tashbayev, who headed the agency until September, is suspected of embezzling gold and using his position to sell mining licences on the black market, the State Committee for National Security (SCNS) announced on December 3, according to reports in the Kyrgyz press. He has been charged with abuse of office and illegally issuing licences, and will be detained until January 30 while an investigation is carried out.

The SCNS is currently investigating eight criminal cases involving the theft of gold concentrate from state gold miner Kyrgyzaltyn and the illegal sale of licences.

Kyrgyzstan has been trying to clean up the mining sector since 2010. Observers say that under former President Kurmanbek Bakiyev the state mineral resources agency was one of the most corrupt agencies. It is suspected of issuing numerous licences to government cronies, who then failed to develop the deposits, hoping instead to sell them on.

International investors complain that since the April 2010 revolution successive governments have taken a somewhat heavy-handed approach to cleaning up the system at times. The initial step was a moratorium on all licences, including renewals of existing licences, was initially introduced, leading to delays at deposits already being exploited.

At the same time, progress has been made, and a new mining code was adopted in April 2012, under which even relatively small deposits now have to be auctioned in a transparent bidding process. However, as shown by the arrest, problems remain, with the allocation of mining licences becoming a politically sensitive issue amidst growing resource nationalism.

That has seen Tashbaev come under scrutiny from local activists. His dismissal as head of the state mineral resources agency followed shortly after political ally - Respublika party leader Omurbek Babanov - lost the post of prime minister.

Tashbaev was also close to Bakiyev's influential younger son Maxim, and in 2009 was appointed his deputy at the Central Agency for Investment. Surprisingly, following Bakiyev's fall in the revolution, Tashbaev joined the interim government, and was appointed to lead the powerful agency shortly afterwards.

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