Kyrgyzstan Says Cooperation with Centerra Unlikely in Mine Clash
(Bloomberg) -- Future cooperation between Canadian miner Centerra Gold Inc. and Kyrgyzstan’s government in operating a gold mine in the Central Asian nation is unlikely, according to the nation’s finance minister.
The government took over Kumtor mine late last month, using environmental concerns and tax issues to justify the move. It is now the subject of international arbitration initiated by Toronto-based Centerra, while the mine’s operating company Kumtor Gold filed for Chapter 11 bankruptcy in New York on May 31.
“After a series of events that have taken place over this time it will be extremely hard to build a dialogue,” Akylbek Japarov, the economy and finance minister, said in a written response to questions. “As for the likelihood of Kumtor being transferred to Kyrgyzstan as a result, I will not deny such outcome above all because of actions by Centerra’s management.”
President Sadyr Japarov assumed power in Kyrgyzstan last October. He has long been a proponent of nationalizing Kumtor, one of the largest foreign investment projects in the country and an asset responsible for almost 60% of Centerra’s 2020 revenue.
Kyrgyzstan has accused the company of damaging nearby glaciers by storing leftover mined material on them. Centerra said such claims are without merit and have no justification under longstanding investment agreements or applicable law. Centerra Chief Executive Officer Scott Perry said in a June 11 interview that he wouldn’t rule out a “clean divorce” among options to settle the dispute.
“We remain willing and available to engage in a constructive dialogue with the leadership of the Kyrgyz Republic, but to date the authorities have repeatedly refused our attempts to open talks,” Centerra said in an emailed statement. “We have operated the mine for decades in cooperation with many successive governments, and our goal remains to find an acceptable resolution to this dispute.”
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