China Development Bank provides $184 million loan for Taldybulak Levoberezhn Copper-Gold Mine Project

Project narrative

In 2006, Kyrgyzaltyn OJSC — a Kyrgyz state-owned company — entered into a 60:40 joint venture with Kazakh company Summer Gold Ltd., forming Altynken LLC to develop the Taldybulak Levoberezhn (Taldybulak Levoberezhny) copper-gold mine and securing the necessary licenses. However, by 2010, concerns arose regarding the Summer Gold Ltd's failure to meet investment obligations due to construction delays In September 2011, Summer Gold Ltd. sold its 40% share in Altynken LLC to Superb Pacific Ltd., a subsidiary of Zijin Mining Group Company Ltd. Then, on September 10, 2013, Zijin Mining Group Company Ltd. and Altynken LLC signed a third-party strategic cooperation framework agreement with China Development Bank (CDB) in Bishkek. On August 1, 2014, a $184 million loan from China Development Bank for the Taldybulak Levoberezhn Copper-Gold Mine Project achieved financial close. The borrowing terms of the loan are unknown. The purpose of the project was to develop the Taldybulak Levoberezhn (Taldybulak Levoberezhny or Талды-Булак Левобережный) copper-gold mine in Kyrgyzstan's Kemin district. In July 2015, production at the gold mine officially commenced. Production was originally scheduled to commence in June 2014. During the construction phase, Altynken LLC encountered tensions with the local population. Between 2012 and 2014, local residents raised concerns, primarily related to two issues: compliance with environmental norms and the requirement to source at least 90% of the labor force locally. The first issue was dismissed by many representatives of local and state authorities, who considered it a tactic employed by populists to make unreasonable financial demands. It should be noted that the construction process underwent repeated inspections by responsible agencies, causing delays as the company struggled to obtain necessary permits promptly. The second issue, due to its high social sensitivity, led to the temporary suspension of construction works in October 2012. Although Altynken LLC, as the main investor, adhered to the local employment quotas, such demands could not be enforced on specialized contractor companies from China that were employed during the construction phase without negatively impacting the technological process. This situation led to a higher number of Chinese workers, which raised concerns among local residents. Tensions escalated into a mass protest following a brawl between workers, resulting in the evacuation of Chinese workers and the temporary suspension of work. However, the conflict was eventually resolved, and work resumed. Since 2015, most of the initial problems have been addressed as Altynken LLC increased production capacity and stabilized operations.