Crossroads Asia

Full of Gold: Chinese Company Which Sacked Kyrgyz Miners Claims Hard Times

Full Gold Mining fired 370 Kyrgyz workers after they refused new contracts that included a 30 percent salary cut.

Full of Gold: Chinese Company Which Sacked Kyrgyz Miners Claims Hard Times
Credit: Flickr / theklan

On January 5, a Chinese mining company fired 370 miners in southern Kyrgyzstan after their contracts expired. The miners, who worked at the Ishtamberdi mines in the Jalal-Abad region, reportedly had refused to accept amendments to their employment contracts which would have lowered their salaries. Thus, the company terminated them. The miners in turn threatened a protest if they were not given their jobs back.

The Chairman of the Mining and Metallurgical Trade Union of Kyrgyzstan, Eldar Tajibayev, said that the previous fixed-term contracts were in contradiction with the Kyrgyz Labor Code given that Full Gold has a 20-year  license for the development of Ishtamberdi.

Another union representative said that workers at the mine had been offered a new contract but salaries would be slashed by a third, while benefits like food allowance and support for professional development would also be suspended.

Full Gold Mining, a Chinese company that has operated the Ishtamberdi mines for more than five years, said that the salary cuts were necessary given the company’s financial situation. “Our company has been suffering losses since it began to work,” a company representative said. “Workers are very expensive, so we decided to change the terms of the contract. We ask for help to survive a difficult period together. The funds invested have not yet paid off. In order not to become bankrupt, we are forced to take such steps.”

The company and the union met to discuss the impasse. The meeting was facilitated by the Kyrgyz State Committee for Industry, Energy, and Subsoil Use. The two sides are still at loggerheads when it comes to the details of how to reduce operating costs. The union representatives say they’ve come halfway, agreeing to freeze wages but that the cutting of benefits which the company proposes is a violation of the state’s labor laws.

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Gold accounts for nearly 50 percent of Kyrgyzstan’s exports and while gold prices have risen in the past year, the current price is still below that of five years ago.

The country’s mines, often operated with an international partner, are frequently a touchstone for political and economic frustrations. None have been more controversial than the Kumtor Mine, operated in partnership with a Canadian firm and a regular target for calls to nationalize. But the Full Gold Mining flare-up underscores the difficulties faced both by miners and companies involved in extractive industries in Central Asia. The whims of the market can change a company’s economic calculus; at the same time there are legal constraints on how companies can treat workers and what kinds of contracts and benefits are required.

Full Gold Mining’s Chinese affiliation — China Road and Bridge Corporation is listed among its founders — will draw attention, even if it’s not explicitly relevant to the issue at hand. China’s Belt and Road Initiative (BRI) has focused attention on Chinese investments in Central Asia, whether they predate the initiative (like Full Gold Mining’s Kyrgyz operations) or not. Chinese companies have been accused of importing Chinese laborers rather than hiring locally and substandard work in Kyrgyzstan, as they have elsewhere, leading some to question whether the BRI will be transformative as promised or merely exploitative.