Kyrgyzstan and Centerra Gold end Kumptor Gold mine dispute
An agreement has been struck in the dispute involving the ownership and management of the Kumtor Gold Company (KGC).
The Kyrgyz Republic and Kyrgyzaltyn, the Kyrgyz State-owned gold mining corporation, will assume all responsibility for the mine and retain income earned after May 15, and Canada-based gold mining company Centerra Gold will make a cash payment of US$50mn which will "satisfy its obligation to repay an outstanding loan to KGC".
Centerra will make a further cash payment of approximately US$36.6mn to Kyrgyzaltyn, of which approximately US$25.5mn will be remitted to the Canadian tax authorities and the remaining approximately US$11.1mn will be paid to Kyrgyzaltyn, and a US$53 million reclamation trust fund will be returned to the Kyrgyz Republic, according to the statement.
Kyrgyzaltyn and Centerra will exchange shares, with Kyrgyzaltyn returning its shares in Centerra, and receiving 100% ownership of KGC. The agreement also foresees the full and final release of all claims of the parties, termination of all legal proceedings involving the parties in all jurisdictions with no admissions of liability.
In a live address to the nation, President Sadyr Japarov hailed the agreement as “a historic breakthrough” and pledged to use the increased revenue towards achieving the country’s sustainable development goals.
"Our national assets are now exactly what they should be – in our own hands. This proves that we are on the path of development and growth," he said.
“Throughout this dispute, we have maintained that this is not about nationalisation. It is not Kyrgyzstan against foreign companies. It was about the specific issues with the management of Kumtor mine. We have always said that Kyrgyzstan is open for business. We will always welcome investment from those who share our respect for the rule of law, our national assets, and our national interest. This agreement proves that.
“I want us to now move forward as one people. In spite of all that has happened, we must take decisive strides forward. This is what we as people free in our own sovereign state must do. Our destiny is in our hands now and it is time to take responsibility for our future. Today's decision on Kumtor mine is just the beginning of many more great accomplishments in the development and growth of our country.”
Kumtor Mine has been under interim external management since May 2021. In January, the mine posted revenues of US$856mn – of which US$621mn was generated under the interim management. Last year also saw the mine reduce its overall extraction costs by US$220 per ounce.
