ShareBISHKEK, Kyrgyzstan: 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.
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, Sadyr Japarov had led an unsuccessful bid to nationalize the mine both inside parliament and on the streets, where he oversaw several chaotic rallies against the company.
Japarov initially played down the possibility of nationalizing 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". President Sadyr 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
