Kyrgyzstan on August 27 launched underground gold mining at its high-altitude Kumtor deposit. Announcing the move, government officials added geological reserves of 147 tonnes of gold to the state balance sheet.

In 2021, the newly installed populist-nationalist Japarov presidency controversially seized the then solely open-pit mining operation from Canada’s Centerra Gold. Establishing state control over the mine had for many years been a political goal of Kyrgyzstan’s leader Sadyr Japarov, prior to the late 2020 revolution that opened his path to the presidency.`

In a statement, the presidential press office said around 1,600 metres of tunnels had so far been dug at Kumtor – located at 13,000 feet (almost 4,000 metres) near the Chinese border in the Tian Shan mountains. Kumtor is very important to the economy of Kyrgyzstan, Central Asia’s second poorest country. In recent years, it has produced around 10% of its GDP.

The underground project is expected to operate for 17 years, the presidency added.

The world gold price has lately been setting records above $3,000 a troy ounce.

Kyrgyzstan also proposes to start processing the Kumtor pond of tailings, leftovers from ground mining for gold. The government says the pond could contain more than 100 tonnes of gold, though experts question how much of this can be recovered, given the technology available.

Centerra Gold began mining at Kumtor in 1997.

After the state seizure of the mine, an agreement for the transfer of the mine to the government was eventually struck with Centerra, but not before, in late 2021, the company raised anxieties that the mine under the new government-appointed management, was falling into operational difficulties. One claim was that glacial water was flowing uncontrolled into a mine pit. The government denied there were any such problems.

A difficulty with the Kumtor deposit is that a substantial amount of its gold is situated under glaciers, which environmentalists do not want to see disturbed.

Radio Azattyk on August 27 quoted Japarov as saying: "Well, Kumtor has a future ahead of it, it will continue to work for the benefit of the country and the people for another 40-50 years. What I mean by the benefit of the people is that in the last three years you have witnessed the delivery of state mortgage houses to ordinary people. You should know that all the money spent on those constructions comes from Kumtor.

“The money from Kumtor is being spent on roads being built, schools, kindergartens, increasing salaries, pensions and benefits, purchasing military and other modern equipment, and all the good things that are happening in the country."

Kumtor has produced 54 tonnes of gold and generated $3.45bn in revenue since May 2021, with $891.6mn received in taxes and other payments, according to the presidency.

Some MPs have claimed transparency on Kumtor gold sales and profits has deteriorated since the government took over the mine via state company Kyrgyzaltyn.

Lawmaker Iskhak Masaliev, told Radio Azattyk: “We [Kyrgyzstan] make a good profit from selling gold. Now details on this is classified information, so unless you specifically request it, they won't release it publicly.

He added: “The MPs are still monitoring things, and they've stopped asking where the money came from and where it went.”