Community Development

KUMTOR

The Kumtor mine plays a particularly important role in the economic and political life of the Kyrgyz Republic. It is the largest private sector employer of Kyrgyz citizens and is the largest foreign investment in the country. At our Kumtor Operations, partnership with local communities is an important factor for successful production activities. Guided by the principle of social responsibility, Kumtor Operating Company is carrying out a number of sustainable development and investment projects in regions where the Company operates and most of its employees come from.

At the end of 2005, the operation employed a total of 1,742 permanent employees, of which 1,637 or 94% were Kyrgyz nationals. This represents an increase from 82% at the beginning of the operation as a result of Kumtor's training programs and reflects a policy of employing as many local people as possible in the company's operations.

By 2010, the operation employed over 2,600 employees, of which 95% are Kyrgyz nationals.

CAPACITY BUILDING

During the period between 2006 and 2008, the Company successfully implemented a three-year regional sustainable development program with a budget of 50 million soms or US $1.6 million. While implementing this program, the Company strove to support local initiatives in creating sustainable projects designed to cope with social matters, expand rural infrastructures and strengthen the economic potential of the region. Under the program, assistance was rendered to six communities, including Tamga, Tosor, Barskoon, Chon-Zhargylchak, Kichi-Zhargylchak and Ak-Terek with a total population of about 20,000.

In cooperation with local communities the Company has established:

• an agri-engineering center, which furnishes services for community farmers;
• a microcrediting agency, which provides credits for rural businesses;
• a fruit-processing plant supplying sauce and juice not only to Bishkek but also to foreign markets.

The fruit-processing project was submitted for Sustainability Awards in Asia Mining Congress and in March 2009 was recognized as one of the best Community Development Initiative Projects.

The Company gives close attention to health service standards in the local communities. At Barskoon, the hospital was renovated and a modern health referral center commissioned.

In 2010, the Company contributed $300,000 to key social projects being implemented in its target area. KOC and UNIFEM are involved in a $100,000 joint project stimulating female enterprise and initiative in the Ton community, Issyk-Kul province. The Company contributes 1% of gross revenue to the Issyk-Kul Province Development Fund created to finance key social and economic projects. In 2009, its contribution was $3.1 million while in the first six months of 2010 it has amounted to $4.9 million.

The corporate charities have exceeded US $6 million during the past few years. Particular attention is given to children’s institutions and target support for the least protected groups. Instrumental in this work is Kumtor El Aykin, a public fund established by local residents. In 2010, Kumtor Operating Company sponsored a series of fairy tales and legends published in the Kyrgyz language with a total print run of 18,000 copies. The books were donated to children’s libraries across the Kyrgyz Republic as well as to the libraries and schools of Issyk-Kul province, the cities of Osh and Jalal-Abad as well as to orphanages through partner NGOs.

The Company provides active support for biodiversity and wild-life protection programs in the Sarychat-Ertash State Reserve, funds the fish reserves reproduction program for Lake Issyk-Kul as well as engages in environmental education programs for the schoolchildren of the region.

BOROO

Establishing and maintaining positive government and community relationships is a high priority for the company, one that is reflected in a comprehensive range of social and economic initiatives. At Boroo these include:

• Focusing our recruitment efforts within the two soums or provinces in which the mine is located. We have established a recruitment and training centre in Baruunkhaara and continue to fill operating and construction positions with local people to the greatest possible extent.
• Hiring support services from nearby communities, such as transportation of mine personnel
• The appointment of a Manager of Community Relations to act as a liaison with the local population
• The establishment of Social Development Fund for the surrounding community, which utilizes input from local stakeholders.

During 2004, Boroo provided funds to certain projects within Mongolia with particular focus on the surrounding communities. The mine supported local schools by upgrading their facilities, including the renovation of the school dormitory at Baruunkharaa and improvements to the heating, plumbing and drinking water systems and construction of a new canteen at Bilig. Other infrastructure projects included building an agricultural centre and community centres in Bayangol Soum and Mandal Soum, repairs to municipal streets and provision of dental clinic equipment.

Since 2005 Centerra has assisted in developing local infrastructure including a library, medical clinic and community centres. A sustainable community development fund and micro loan program were also implemented to alleviate unemployment and poverty by creating approximately 30-40 new jobs annually and supporting the development or growth of small and family-owned businesses. In 2011 Centerra is assisting in building a new modern maternity hospital in the capital, Ulan Bataar, with the capacity for 50 intensive care units for newborns.