The Jerooy deposit located in Talas Region in northwestern Kyrgyzstan has estimated reserves of nearly 90 tonnes of gold and about 25 tonnes of silver. The project, which is being implemented by Russia’s Alliance Group with support from VTB Bank, is among the largest in the history of Russian-Kyrgyzstani economic cooperation in terms of investment volume. The potential level of production at the enterprise is five tonnes of gold a year.
The ceremony to launch the Talas Gold Mining Complex was also attended by President of Alliance Group and President and Chairman of the Board of Directors of Russian Platinum Musa Bazhayev, and President and Chairman of VTB Bank Management Board Andrei Kostin.
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Speeches made at the ceremony to launch the Talas Gold Mining Complex
President of the Alliance Group, President and Chairman of the Russian Platinum Board of Directors Musa Bazhayev: Mr President Putin, Mr President Japarov, colleagues,
Today, we are not just launching a gold ore plant but are opening a new page in the history of cooperation between strategic partners – the Russian Federation and the Republic of Kyrgyzstan. Jerooy is also a pilot project in the Eurasian cooperation format involving Russian, Kyrgyz and Kazakh companies. VTB Bank has become a strategic partner in funding the project. Availing myself of this opportunity, I would like to thank Mr Kostin and the entire VTB team. Thank you very much for your support. You allocated $190 million for project financing, and due to this we are now launching the project.
This gold mining plant is an advanced, environmentally clean and safe facility based on cutting-edge technology. The production byproducts will be harmless and we guarantee zero dumping into the environment. The gold mill will process 1.5 million tonnes of ore and produce five tonnes of gold a year. This gold ore plant will create over 1,000 jobs. Another 2,000 people or more will receive jobs at related plants in Talas Region. Importantly, Kyrgyz citizens will make up over 90 percent of all plant employees.
Investment in Jerooy has already topped $400 million. In all, it will total over $600 million during the project’s entire implementation. The Kyrguz Republic will receive over a billion dollars in tax revenue and withholding into social funds from Jerooy. We have established the Bakubat Talas welfare fund in which we invest $2 million every year. In all, we will put over $50 million into this. These funds are used for social support, payment benefits for low-income people, new schools, and assistance for small and medium businesses in Talas Region.
This project is being carried out primarily thanks to support from the top government leaders of Russia and the Kyrgyz Republic. Today, speaking on behalf of the thousands of people who built the plant and those who will work at it, I would like to convey our deep gratitude to the presidents of our countries for making this project possible.
President and Chairman of the Management Board of VTB Bank Andrei Kostin: President Putin, President Japarov, colleagues,
In its 30 years in business, VTB Group has participated as a dependable financial partner in numerous major industrial and infrastructure projects. We support Russian companies’ operations in international markets, and we are active in the Eurasian space, including Azerbaijan, Armenia, Belarus, Georgia, and Kazakhstan.
The Talas Gold Mining Complex is our debut project in Kyrgyzstan and the republic’s largest project with Russia’s participation, with funding totaling the equivalent of $190 million. The complex will take the mining industry, which is important for Kyrgyzstan, to a new level. The country's economy thus has an unparalleled production site boasting full cycle from ore mining to gold extraction.
Support from the two countries’ presidents makes this project special for us as investors. After all, entering a new market is always about being exposed to major legislative, regulatory and commercial risks. Sometimes years and even decades separate a memorandum of intent and actual implementation of a project. We can safely say that the Jerooy project was lucky in this regard. A dynamic start was initiated just two years ago during the Russian President’s state visit to Kyrgyzstan. I am convinced that the involvement of our respective presidents and Russian-Kyrgyzstani relations based on mutual trust and strategic partnership have significantly mitigated the above investment risks, which have allowed us to implement our plans so soon.
Today's event also reminds us of fundamental economic values. For thousands of years, gold has been the most important asset. Suffice it to say that since the time VTB Bank joined the Jerooy project, world prices of this metal have grown by 30 percent. Therefore, I believe that even with consideration for the growing role of the new industrial economy, the investment demand for gold will remain high for many years to come. So, we should not be worried about the plant’s prosperous future.
Congratulations to all of us on the launching of the Talas Gold Mining Complex, and good luck.
President of the Republic of Kyrgyzstan Sadyr Japarov: Mr President, participants of today's significant meeting,
I welcome you all to this long-awaited and important event for our country, the ceremony to launch the Talas Gold Mining Complex at the Jerooy deposit.
Allow me to express my gratitude to you, Mr President Putin, for personally attending today's event. I would like to note that the joint opening ceremony of this gold mine is evidence of a close partnership and robustly expanding relations between the Kyrgyz Republic and the Russian Federation.
Discovered half a century ago, the Jerooy field is one of the largest gold deposits in Kyrgyzstan. We all know how much time and effort was spent in negotiations to make this investment decision and the implementation plan. We would like to thank our investor, Alliance Group, for investing in the economy of Kyrgyzstan.
The project operator, Alliance Altyn, has come a long way since it acquired its development permit. And now Russia and Kyrgyzstan are launching an investment project together, which will make a significant contribution to the sustainable development of Talas Region and Kyrgyzstan as a whole.
As of today, the investor has contributed almost 1.5 billion som in taxes and levies to the state budget and extra-budgetary funds; after the gold mining and processing facility begins operations, revenue to the state coffers will increase.
It is gratifying to note that the total number of employees involved in the project will be about 1,000 people, of which more than 95 percent are citizens of the Kyrgyz Republic.
Taking this opportunity, I would like to congratulate everyone on the start of an important period in the implementation of the large-scale Kyrgyz-Russian project to develop the Jerooy field.
Kyrgyzstan and Russia are bound by special relations based on alliance and friendship. I made my first foreign visit as President of the Republic of Kyrgyzstan to the Russian Federation in late February.
Mr President, I am pleased to say that the meeting with you was very productive. We agreed to strengthen and build up multifaceted long-term cooperation between our countries and bring it to a new level.
Today, we are taking part in the launch of a project that is strategically important for Kyrgyzstan, which, without doubt, will serve as a good example of investment cooperation between our countries.
It is essential for investors to be able to work without any impediments, so among the first executive orders I signed were those protecting property and supporting entrepreneurs and investors, as well as reforming the mining industry of the Kyrgyz Republic. Thus, we set the course for a consistent and firm policy in these areas.
However, I have two important points to make. First, the comprehensive dialogue between enterprises and the local population must be expanded. Second, all applicable environmental requirements must be complied with when developing the field.
Rest assured that the Kyrgyz Republic will continue to support projects of this kind, which increase the potential of the mining industry and, of course, help the development of the national economy in general. Russian investment in the Kyrgyz market is always welcome.
Jerooy is currently the country's largest operating investment project with the involvement of a Russian bank partly owned by the state. I am confident that our joint activities will improve the country's image and lead to new large investments in Kyrgyzstan’s economy, and the successful implementation of the Jerooy project will give a powerful boost to the investment potential of the republic.
Once again, let me thank you, Mr President, for personally supporting this project.
I would also like to express my gratitude to everyone who has made and continues to make their contribution to the Jerooy project, in particular, the President of Alliance Group, Musa Bazhayev, who used his firm belief and determination to implement the initial plans that have contributed to strengthening friendly relations between our two countries.
Let me congratulate everyone this significant event and wish success to the Alliance Altyn team in implementing the Jerooy project.
(Speaking Kyrgyz.) Dear Kyrgyzstanis, residents of Talas,
The blessed land of Talas was once the home of our great ancestor Manas the Magnanimous, who rallied our scattered tribes together. The land of Talas has always been the centre of the struggle for unification, as well as a spiritual and cultural centre. Talas has always maintained interethnic harmony, and people of different nationalities have worked here side by side for the good of our state.
Today, in the presence of our guest, the head of the Russian Federation, Vladimir Putin, we are launching the Talas Gold Mining Complex at the Jerooy deposit, via teleconference.
We believe that the implementation of this project will have a positive effect on the economy of our republic, including Talas Region. After the Talas gold mine at the Jerooy deposit goes into operation, millions of som will be channeled annually into the development of Talas Region, and billions of dollars are to come into the republic’s budget. Thanks to this, the state budget will grow every year.
True, there are some who are not happy with this situation, but nevertheless, so much effort has been invested and so much work has already been done – we will not stop, we just cannot stop now. This land should work for everybody’s good through agreement and the consent of all parties involved.
Dear residents of Talas,
With the ideas of national unity and cohesion in this blessed land in mind, I especially note that Talas, as the home of Manas the Magnanimous, was of great importance in the development of the Kyrgyz people. The origins of Kyrgyz statehood, our national and spiritual vision originated here. We are united in our aspirations, and we have one common goal – to increase the wealth of the nation, to promote development and creation for the sake of the future of our country. To do this, we need harmony, peace, and stability – we must never forget this.
Once again, dear residents of Talas, I express my gratitude to you and wish you prosperity and growth.
President of Russia Vladimir Putin: Mr President, friends, ladies and gentlemen,
The launch of the Talas Gold Mining Complex at the Jerooy deposit is indeed an important project for Russian-Kyrgyzstani economic cooperation and, in general, for the strengthening of partner and allied relations between our nations. I fully agree on this with Mr Japarov.
We have successfully implemented one of the largest joint projects. The top managers of Alliance Group and VTB Bank have told us of the efforts and resources invested in the development of the Jerooy deposit and the construction of the Talas Gold Mining Complex.
I would like to point out that we are talking about truly record Russian investments in Kyrgyzstan estimated at some $600 million.
The Talas Gold Mining Complex will employ cutting-edge technology and state-of-the-art equipment, including those compliant with all nature conservation regulations and standards. This will allow the production of up to five tonnes of gold per year, efficiently and with no environmental damage.
I would like to note that the Jerooy deposit, which will supply ore to the Talas Gold Mining Complex, was, as the President of Kyrgyzstan has just pointed out, explored by Soviet geologists back in 1968. The scientists estimated that the gold reserves in the deposit amount to around 90 tonnes and silver reserves to around 25 tonnes. This means that the facility will have resources for stable work to continue for years.
The mining complex is creating more than a thousand jobs offering new employment opportunities to the local population. Small and medium-sized enterprises in Talas Region will be able to secure lucrative deals to supply goods and services required by the complex.
Russian investors intend to provide significant financial support for the social development of Talas Region. The company director already said that a designated foundation was established that will receive up to $2 million every year. Almost half of these funds will be spent on socially significant projects in the region while the rest of the money will be used for subsidised lending to businesses.
In other words, the new gold mining facility will bring considerable benefits both to Talas Region and the Kyrgyz economy in general.
As the President mentioned, the state budget will receive significant revenue. The mining complex has already transferred $100 million to the Kyrgyz budget as the Jerooy deposit license fee. It is estimated that subsequently, the tax revenue received by the Kyrgyz budget will indeed grow, to about $70 million per year.
In conclusion, I would like to thank all Russian and Kyrgyzstani co-founders and investors of the Talas Gold Mining Complex and its personnel, including the engineers and workers who built it, for their well-coordinated and effective operation.
Of course, I would like to express gratitude to the leadership of Kyrgyzstan and personally to Mr Japarov for their attention to the interests of Russian economic operators and their efforts to create a favourable investment climate in the Kyrgyz Republic. We hope that the Kyrgyz authorities will continue to support the new enterprise.
I would like to repeat that the implementation of this important joint project will be a symbol of the successful development of the multifaceted and mutually beneficial Russian-Kyrgyzstani partnership and strong friendship between our nations, which is fully in line the with spirit of the agreements reached during a recent visit by the President of Kyrgyzstan to Moscow. We are grateful to you for making your first foreign visit to our capital.
I hope that all the efforts we have been making together to promote our economic cooperation, as well as the funds that have been invested with the aim of allowing Kyrgyzstan to become a full-fledged member of the EAEU economic alliance, and the sum invested was indeed considerable, running into hundreds of millions of dollars, I hope that our joint efforts will continue to facilitate the implementation of major industrial projects that will benefit both sides economically. I would like to wish all the very best to all those who are involved in this process.
President of the Kyrgyz Republic Sadyr Japarov: Mr President,
I would like to once again express our deep gratitude to you for taking part in the ceremony to launch the Jerooy deposit. I would also like to wish all the best to Alliance Altyn and to all those present at this ceremony.
Once again, thank you.
Vladimir Putin: Thank you. Hope to see you soon.