ASSESSMENT OF THE COAL RESOURCES OF THE KYRGYZ REPUBLIC:

COAL CHARACTER AND DISTRIBUTION, GEOLOGY, MINING, AND IMPORTANCE TO THE NATION'S FUTURE

USGS Open File Report 97-137A (English)

I. EXECUTIVE SUMMARY

This analysis of the coal industry in the newly-independent Kyrgyz Republic (formerly part of the U.S.S.R.) was done by a team composed of geologists, a mining engineer and a coal utilization specialist under sponsorship of the U.S. Agency for International Development. In Kyrgyzstan the members of the team analyzed coal resources and the mining practices in thirteen mines (in six mining regions), visited major thermal and electric stations that use coal, and consulted technical and management people in laboratories, ministries and in state and private mining companies.

This report, available from the U. S. Geological Survey in English and in Russian, contains this executive summary, the large main body of the report, and appendixes. The executive summary first lists the conclusions and suggestions for action and follows with the background and methods of the study and with description of the present situation of the state and private coal industry in Kyrgyzstan.

A. CONCLUSIONS AND SUGGESTIONS FOR ACTION

The preferred future energy budget of the Kyrgyz Republic requires commitment to mining and utilization of the coal resources of the nation. Without domestically-produced coal, future energy budgets of the Republic will depend on imported fuels to satisfy much or most of the energy requirements of Kyrgyzstan.

In the most recently available energy policy planning document (Amanaliyev, 1993), it was expected that coal would satisfy a substantial portion of the Republic's energy budget for the foreseeable future. In 2010, eight million tonnes of coal would be required, and coal and hydrocarbon products would satisfy 57 percent of the total energy demand, with hydroelectricity providing the remainder. Obviously, this scenario may change as a result of the recent drop in total energy supply/demand and the drastic decrease in coal production in recent years. The desirability of satisfying domestic energy requirements with indigenous energy sources will remain.

In order to help the coal industry of Kyrgyzstan satisfy its responsibilities in the future energy budgets of the nation the following suggestions for action are offered:

1. Resume exploration and development of the nation's coal resources. Coal exploration peaked several decades ago and has been conducted at a very low level of effort in recent years. Both exploration and development activities have apparently been concentrated in past and present mining areas, and as a consequence so are a large portion of the estimated potentially recoverable reserves of the country. Some mining areas reportedly still have considerable mining potential and may be worthy of exploration to evaluate the amount of remaining reserves that might be available for mining. Some known coal areas that might be important for future mining have been inadequately explored and require exploration and development studies to determine their resource potential. In some known coal regions of the country, coal mining has apparently never been seriously considered and the quantity, quality and distribution of the coal resources is poorly known. Coals are not presently selected for low sulfur content, and increased environmental concerns may require this. Informed planning for the nation's energy future requires more information than is presently available.
2. Evaluate the amount of coal available and economically recoverable from a market-economy viewpoint in the coal areas of the country. Economic factors previously used in the evaluation of Kyrgyzstan's potentially recoverable reserves are no longer valid. Up-to-date classification from a free market-economy standpoint is needed. The studies should provide basic data about the coal resources that are recoverable at a cost that the economy of Kyrgyzstan can accept. Studies of this type are required before investment of time, energy and capital in elements of a coal industry can be further justified.
3. Gather and organize the presently available information that can affect the future coal industry of Kyrgyzstan. As a minimum, the location of such information should be recorded. Ideally, the information should be gathered and organized so duplication might be avoided with considerable savings in time and money in the future.
4. Encourage mines with depleted reserves and worn out equipment to produce as much coal as possible for as long as possible with a minimum of capital investment until safety and efficiency require closure. Support changes in mining methods that may extend the life of such mines.
5. Determine which mines and mining areas can increase coal production in a short time. Provide solid, market-economy-based data on their coal availability and recoverability. Establish the engineering and economic parameters for successful operation of such short-term elements of the future coal mining industry. Seek capital investment for development of such areas.
6. Increase production to satisfy local demand in all parts of the country that contain economically recoverable coal by assisting the Private Enterprises Mining Program. The Private Enterprises Mining Program is the successor to the Small Enterprises Mining Program that was initiated a few years ago to satisfy critical domestic coal needs. This program needs assistance and training in resource understanding, engineering technology, marketing concepts and techniques as used in a free-market-economy. The 15 licensed small private mines in the program were responsible for more than one-eighth of the total coal production of the Republic in 1995. The small private miners should be encouraged and assisted in their efforts to become responsible members of a free-enterprise, market-economy system.
7. Research and test the feasibility of briquetting as a solution to the problem of coal fines. Because of the friability of the coals of Kyrgyzstan a large proportion of the coal produced is of fine-size (13mm or less). At the present time, only coarse coal has a ready market. Aggregation of the otherwise useless fine-sized coal into a coarser product is worthy of investigation. Demonstration of the technical feasibility of making usable briquettes from the variety of coal ranks, grades, types and available binder materials is required. Of equal importance and need is informed evaluation of the economics of production and the size, location and financial capabilities of potential markets for the briquettes.
8. Investigate the possibility of increasing coal production at the Dzhergalan mine in the Issyk Kul coal region to supply coal to the Chu Valley Region. The present dependency of northern Kyrgyzstan on imported coal might be at least partially alleviated by supplying better-quality domestic coal to the district heating and electricity-generating plants at Bishkek and Kara Balta.
9. Increase the routine maintenance of existing roads used to haul coal and extend the railroad system of the Republic. The road and railroad network that was inherited from the former Union has declined severely. The existing rail network was not designed to serve the economy within the present national borders. An expanded railroad transportation system is needed to help solve the problem of transporting domestically-produced coal for use internally, and perhaps for export.
10. Schedule periodic, preferably annual, reviews of the coal industry of the Kyrgyz Republic to provide a continuing update and analysis of the progress of coal exploration, mining, marketing and utilization. Reviews by country-knowledgeable specialists would be a source of unbiased, reliable information for those developing the coal industry of the Republic, for those contemplating investing in the industry, and for those interested in assisting and supporting the coal industry as a vital part of a sound market-oriented economy.

More than 50 percent of the energy resources of Kyrgyzstan are embodied in its coal resources--hydropower constitutes the bulk of the remainder. A significant part of the energy to be consumed by Kyrgyzstan in both the short-and long-term future is projected to be provided by coal. If coal is not produced domestically it must be imported, as are most oil and gas, with the attendant international exchange and dependency problems.

Inherent in the previous suggestions is the requirement for training of various kinds. Training and practical experience are needed in mine management, mine planning and design techniques, financial systems and marketing. The small private coal-mining enterprises need assistance specifically in understanding geologic and mining engineering factors, mining technology, development and maintenance of markets, and training in the basic economics, legal requirements and societal responsibilities of private enterprises.

B. BACKGROUND

Assessment of the coal resource situation in Kyrgyzstan was identified by representatives of the United States Agency for International Development and officials of the Kyrgyz Republic (Kyrgyzstan) as a useful area for collaboration. The study was conducted by the United States Geological Survey and consultants provided by IDEA , Inc. of Washington, D.C. with the assistance of counterpart personnel of agencies of the Government of Kyrgyzstan, particularly the Ministry of Industry, Material Resources, and Trade, the Ministry of Geology and Mineral Resources and the Institute of Geology of the Academy of Sciences.

The rugged, mountainous country of Kyrgyzstan contains about one-half of the coal resources of the Central Asian Republics (exclusive of Kazakstan). The geological coal resources of the country are estimated to total about 31,000 million tonnes. However, the amount and distribution of coal resource information allows less than eight percent of the total to be categorized as technically recoverable reserves and the amount that is economically recoverable is unknown.

Coal is present in eight regions in Kyrgyzstan in at least 60 different, named localities. Historically, the coal industry first developed around the periphery of the Fergana Valley of Kyrgyzstan, Uzbekistan, and Tadjikistan where the industry had access to the transportation facilities that served the valley and consequently could serve coal markets in those republics and in Kazakstan. Eventually, two mining areas were opened in the northeastern part of Kyrgyzstan to satisfy local demand there.

During the Second World War, exploration of the coal resources of Kyrgyzstan received emphasis that continued for two decades. Preliminary exploration of the coal resources of the Uzgen basin established the presence of high-quality coals with a range of ranks from subbituminous-A through anthracite, but development for extraction has not followed to the extent possible. Only in recent years have two mining areas discovered in the early '50s been operated in the coal-rich Kavak region of central Kyrgyzstan, but the few roads in the region limit extraction and transportation capabilities. The coal resources of south-central Kyrgyzstan have not been explored beyond reconnaissance stage efforts and only two small mines are present. Exploration and development efforts in Kyrgyzstan have been local and on a reduced scale since the end of the 1960's. The main coal deposits and reserves are summarized in Gavrilin and Kuznetsov, 1968.

C. THIS STUDY

A summary of this assignment is as follows: (a) Gather, interpret, and summarize available information on the coal resources of Kyrgyzstan; (b) Complement the existing data through field observations and cooperative studies; (c) Identify needs and opportunities for expansion of the resource database; and (d) Identify and recommend activities to assist and support short and long-term resource expansion, recovery, marketing and utilization.

A team of four geologists, a coal mining engineer and a coal utilization specialist worked in Kyrgyzstan during October and part of November, 1994. They sampled coals and analyzed engineering practices at thirteen mines (in six of eight coal regions of the country), visited four major thermal and electric stations that use coal, and consulted with technical and management people in laboratories, ministries and other components of the coal industry. Three members of the team returned to Kyrgyzstan in May, 1996 to discuss the findings presented in a preliminary report with counterparts and update the contained information. This report, with its appendixes, contains the information and recommendations from the field work and also analytical data and other results of work conducted in the U.S.

The coals of Kyrgyzstan are widely scattered in a geologically complex terrain; they are all of Jurassic age. They are probably similar in general to Jurassic coals in other parts of Central Asia, in China, and in southern Russia. The largest area of coal-bearing formations that remains intact is in the Uzgen Basin in the East Fergana coal area, other known Jurassic rocks are fragmented and scattered.

The reserves and resources of coal have been appraised according to Soviet systems. Commercial (balance) reserves are estimated (in million tonnes) as about 1250 million tonnes brown coal and 1000 million tonnes bituminous coal and some anthracite. The mining method indicated for these reserves is 300 million tonnes by opencast and 1950 million tonnes by underground mining. Most exploration at a detail needed to define reserves has been confined to sites close to existing mines, with the consequence that reserves are less than ten percent of the estimated geological coal resource of about 31,000 million tonnes.

The coals classed as brown coal B3 are subbituminous in U.S. terms and the long flame coals are mostly high-volatile C bituminous in U.S. terms. The heat yield of produced coals is 20 to 25 MJ/kg (8500-11000 Btu/lb) except where excess rock contaminates the product, and some coals with higher heat could be produced. Over many years most mines have produced coal with 10-20% ash. The petrographic composition ranges to higher inertinite content than in most U.S. and European coals, and associated with this is a generally lower hydrogen content. The samples collected by the team included three with sulfur greater than 2%, but older recorded data show that values over 2% are the exception. Excluding the one high rank coal sampled (low-volatile bituminous), coals sampled by the team are representative of most coals reported produced in Kyrgyzstan and have 8 to 28% bed moisture, 33-51% volatile matter (daf), 71-83% elemental carbon (daf) and 0.3-0.8% vitrinite reflectance. The USGS analyses supported older Soviet work in most respects, but lower hydrogen and lower sulfur were reported in some older work -- possibly a result of selective sampling, not analytical errors.

The USGS trace element data show little that is remarkable in view of typical world-wide values and show no likely problems for coal utilization. Elements like chlorine, selenium and mercury, which may be of concern in some forms of utilization, are notably lower in Kyrgyz coals than in many coals of the world.

D. THE COAL INDUSTRY AT PRESENT AND IN THE NEAR FUTURE

As recently as 1990 the annual coal production of Kyrgyzstan was about 4 million tonnes, but in the last few years coal production has drastically decreased and the production in 1995 was only about 455 thousand tonnes. Reasons for the decrease are given as depletion of reserves in old mine areas, obsolete and worn-out equipment, shortages of fuel, uninspired and unpaid miners, loss of experienced management and technical personnel by emigration, loss of markets by intra- and extra-national decisions, poor transportation infrastructure, and other problems inherent in transition from a centrally-planned economy to a market-based national economy.

The coal industry inherited with independence is in the process of restructuring itself. The previously monolithic government coal company, KYRGYZKOMUR, is in the process of spawning thirteen or more subsidiaries. As the subsidiaries are created, they operate under the overview of newly-created KYRGYZKOMURHOLDING. The subsidiaries, called State Stock Societies, presumably will have more opportunity for individual success or failure than was previously possible. Coordination of effort among the State Stock Societies is apparently the responsibility of KYRGYZKOMURHOLDING; the amount of direction is unclear.

Tenders were recently accepted from the German firm Rheinbraun Engineering und Wasser in response to a request for tenders regarding a coal industry support program for KYRGYZKOMURHOLDING. The start date is about October, 1996. The program will be sponsored by EUROPEAN UNION/TECHNICAL ASSISTANCE CONFEDERATED INDEPENDENT STATES (EU/TACIS). As described in the request for tenders, the program comprises training of one-year duration with emphasis on financial systems, mine management, marketing, and mine planning and design techniques. As much as fifteen percent of the total program funding may provide equipment, perhaps mostly computers. Whether any of the training will be available to private mining enterprises is unknown.

An earlier change in the structure of the coal mining industry in the Republic was the initiation of the Small Enterprises Mining Program with its inherent possibilities of true privatization. Recently the Small Enterprises Mining Program changed to the Private Enterprises Mining Program. The change is from a program initiated as a humanitarian response to energy shortages in parts of the nation, to a program emphasizing the acceptance of production responsibilities by privately-funded and operated enterprises. Private enterprises supplied about 1/8th of the coal produced in the Republic in 1995. The transition to market-responsive, privately-owned, free-enterprise small coal mining companies would be assisted by advice and training in technology, marketing, and small-business operations.

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