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Kyrgyzstan ‘Open to Settling’ Centerra Gold Mine Dispute

The Central Asian nation justified its May seizure of the mine, citing Centerra Gold’s alleged violations of environmental laws and safety regulations


Kyrgyzstan
The Kumtor gold mine in Kyrgyzstan. Photo: Reuters

 

Kyrgyzstan is open to settling its differences with the Canadian investor that operated its giant Kumtor gold mine before authorities took it over earlier this year, a top official said Wednesday.

The Central Asian nation justified its May seizure of the mine, which accounted for 12.5% of gross domestic product in 2020, by citing company Centerra Gold‘s alleged violations of environmental laws and safety regulations.

Centerra has strongly denied the accusations and the two parties are currently locked in international arbitration proceedings in Stockholm.

“The seizure of the mine is based on false information and groundless allegations that undermine everything we have built together,” the Canadian company has said.

Edil Baisalov, cabinet deputy chairman, said in a statement on Wednesday that Kyrgyzstan is “open to reaching an out-of-court settlement that satisfies all parties”.

Baisalov said government investigators continue to “investigate compelling evidence of corruption involving Centerra from 2004” as well as other alleged violations. “We are also ready to pursue legal arbitration to its proper and just conclusion,” he added.

Centerra has called the investigation an excuse to justify the mine’s nationalisation.

“Centerra Gold has invested more than $3.4 billion as we developed and operated a world-class facility to international environmental, safety and engineering standards and extended the life of the mine to more than 34 years,” the company wrote in a “message to the Kyrgyz people” on its website.

“Under our management, the Kumtor Mine became the largest private employer in the Kyrgyz Republic, its biggest taxpayer and a critical contributor to the Kyrgyz economy and important social programs.”

 

‘Failed to Protect Infrastructure’

In September the company warned that since its eviction, Kyrgyz authorities have “failed to adequately protect the mine’s infrastructure from flooding and other threats and may be facing production difficulties”.

Kumtor plays a central role in the former Soviet state’s largely agrarian economy, and has proved a point of contention in struggles between jostling political factions over the years.

Sadyr Japarov, whose dramatic rise from a prison cell to the presidency at the beginning of the year spelled bad news for Centerra, as he had called for the gold mine’s nationalisation when he was in opposition.

Jailed for organising the kidnap of an official, Japarov has always insisted the case was trumped up to punish him for the nationalisation campaign. The populist was freed last year during a period of political turmoil.

Criminal investigations into alleged misdoings at Kumtor have also seen several former prime ministers detained.

The country’s first president Askar Akayev, who in 2005 became the first of three post-independence Kyrgyz leaders to be jettisoned from office amid street protests, has twice flown in for questioning from his de facto exile in Russia.

He was not detained during either trip, but remains under investigation, the national security committee said on Tuesday.

 

  • AFP with additional editing by George Russell

 

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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