Kyrgyzstan, Canadian firm settle row over gold mine

Kyrgyzstan, Canadian firm settle row over gold mine
FILE

Agency Report

Kyrgyzstan reached an agreement with Canada's Centerra Gold to take full control over the long-contested Kumtor gold mine, the ex-Soviet country's president and the company said Monday.

"Kumtor has fully passed into Kyrgyzstan's ownership," President Sadyr Japarov said in a televised national address that came almost a year after Kyrgyz authorities seized control of the gold mine, prompting Centerra to file for international arbitration.

"An amicable agreement has just been signed... Congratulations to the people of Kyrgyzstan on this achievement. This is truly a turning point for the country. This is how the national interests of the republic should be protected," Japarov said.

The Kumtor gold mine accounts for around 12 percent of the economy of Kyrgyzstan, a landlocked, mountainous country of nearly seven million people.

But successive disputes over the mine have helped spoil the investment climate and fuel infighting between political factions in the country.

Centerra said in a statement that it had agreed with Kyrgyzstan "to effect a clean separation of the parties" and to resolve all their disputes.

The agreement means that Centerra will relinquish ownership of Kumtor, the company said, while Kyrgyzstan will relinquish its 26-percent stake in the Toronto stock exchange-listed miner.

"Centerra understands that the agreement has been approved by the government of the Kyrgyz Republic, including both the Kyrgyz parliament and the cabinet of ministers," Centerra said in its statement.

Populist Japarov, 53, was keen to present the deal as an important political victory, projecting a $5-billion windfall from the gold mine in the next decade in his address on Monday.

The settlement will also see Kyrgyzstan receive $50 million as payment for environmental protection and to cover a debt Centerra owed Kumtor's local operator, the Kumtor Gold Company, according to statements from the government and the company.

As an opposition politician, Japarov had led an unsuccessful bid to nationalise the mine both inside parliament and on the streets, where he oversaw several chaotic rallies against the company.

- Japarov jailed -

One of these rallies in 2013 saw protesters kidnap the local governor of the Issyk-Kul region where the mine is located, a crime that Japarov was later accused of orchestrating.

Jailed after returning to Kyrgyzstan from exile in 2017, Japarov's most dramatic turn was yet to come.

In 2020, he was freed from prison and catapulted into the presidential hot seat vacated by Sooronbay Jeenbekov, who resigned under the pressure from Japarov supporters.

Japarov initially played down the possibility of nationalising Kumtor after he came to power.

But Kyrgyzstan imposed "external management" on the mine the following year, claiming that the move was necessary to rectify environmental and safety violations -- claims Centerra called "baseless".

Since then, Kyrgyzstan has had relatively little to celebrate, with the coronavirus pandemic hammering trade with its giant neighbour China -- a lifeline for the import-reliant economy.

The immediate future, too, looks bleak -- hundreds of thousands of Kyrgyz toiling abroad in Russia are expected to send far less money home this year thanks to Western-led sanctions over Moscow's invasion of Ukraine.

Japarov said the negotiations with Centerra had been "very difficult".

"First, there were attempts to present us to the international community as savages, invaders," he said.

"Then we were presented with completely unacceptable demands. We endured everything, and we survived."

AFP

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