Kyrgyzstan claims to have taken over the mine because of environmental and security concerns

The Kyrgyzstan government had no choice but to do so hold order of Kumtor’s largest gold mine from a Canadian owner due to environmental and security risks, according to the director who was appointed to oversee the project.

In an interview with the Financial Times, Tengiz Bolturuk stated that the decision to appoint him as overseas supervisor was due to a “systematic violation” of environmental laws by Centerra Gold and his views on “seizure” of natural resources. “I have seen it with my own eyes,” he said in his first public address.

In May, Bishkek seized Kumtor, the country’s most valuable 500,000 ounces of gold a year, after President Sadyr Japarov signed a new law allowing temporary government to oversee mines that violate environmental laws or endanger lives. It also charged the company $ 3bn.

The move, which has alarmed banks and investors, came just months after Japarov, a nationalist firebrand who fought for the rights of the mines ten years ago, entered the monarchy in a popular election.

Gold production is Kyrgyzstan’s main source of income and Kumtor is the main supplier of all its products.

Centerra, which relies on the mine for more than half of its annual revenue, has responded by launching anti-government policies and seeking bankruptcy protection for its Kyrgyz corporations.

He also sued Bolturuk, who served as government representative on the company for six months until May 2021, alleging conspiracy to defraud the company – which Bolturuk denies. The state owns 26 percent of Centerra.

The line highlights the conflicts that may arise between mining companies, which spend billions of dollars to create complex jobs in remote parts of the world, as well as in developing countries who often feel they are not getting the right share of their profits. natural.

In his remarks, Centerra said Bolturuk’s claims were baseless and that the state environmental watchdog approves its mining licenses each year.

“The environmental activity of the mine has been reviewed abroad several times by the Kyrgyz state environmental adviser, AMEC Foster Wheeler, and the European Bank for Reconstruction and Development,” it said.

The company also said it was concerned about the amount of water in the mine “that could damage” the walls of the pit and create a “environmental threat if the water is not properly maintained”.

“The government will not allow any private individuals to inspect the mine[the situation]. . . or check if it is still safe to use the mine, ”it said.

Kumtor, one of the largest gold mines in western Central Asia, lies at an altitude of 3,600 to 4,000 feet[3,600 to 4,000 m]in the mountains above Lake Issyk-Kul. To find a place for gold mines, a lot of ice has to be moved.

Bolturuk said that under his leadership, the mine had already reduced the amount of glaciers to 1.8m cubic meter, from 4.8m a year ago.

“We will reduce this to almost zero in two years,” he said. Centerra said it simply removed the ice near the open pit and construction site.

Centerra-registered shares in Toronto fell by 40 per cent this year and professionals and investors are increasingly moving from Kumtor’s job to the state administration.

Over the weekend, Japarov said Kumtor is now 100% Kyrgyzstan, “and the only remnant”. “That is, the required documents must be signed and this will happen,” he told local media.

Edil Baisalov, Kyrgyzstan’s Deputy Prime Minister and former ambassador to the UK, said Bishkek was committed to resolving the dispute with Centerra.

“In order to achieve this, we will remain free to reach an out-of-court decision that is fair to both parties. However, we are ready to take legal action to achieve what is right and proper, “he said in a statement.