Kumtor was the largest of Centerra’s three gold mines, accounting for over 50% of the company’s total 2020 output. (Image courtesy of Kumtor Gold Company.)
Kyrgyzstan and Canada’s Centerra Gold (TSX: CG) are close to settling a dispute triggered by the state expropriation of the company’s giant Kumtor gold mine, which accounts for a fifth of the ex-Soviet country’s total industrial output.
“The talks on Kumtor are nearing their conclusion. We are settling the matter with Centerra Gold,” Prime Minister Akylbek Japarov told an energy conference, according to Interfax news agency.
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The Toronto-based miner and the Kyrgyz government have clashed over financial and environmental issues related to the mine for years. Their standoff took a turn for the worse in May 2021, when the nation took control of the mine, alleging that Centerra was running it in a dangerous way for both the environment and nearby communities.
Centerra, which has denied all the allegations, kicked off arbitration shortly after and sued former director Tengiz Bolturuk, claiming that the dual Canadian and Kyrgyz citizen had secretly co-operated to stage the expropriation.
Kumtor was the largest of Centerra’s gold mines, contributing with more than 50% of the company’s total output.
The operation is also crucial to Kyrgyzstan. The mine is the country’s largest private-sector employer and taxpayer and the main foreign investment. Between 1997 and 2020, it produced more than 13.2 million ounces of gold, with last year’s output slightly over 556,000 ounces.
News of an imminent settlement come as other companies with projects in Kyrgyzstan, including Chaarat Gold Holdings (LON: CGH), have revealed financing and construction delays due to investor uncertainty triggered by the seizure of Kumtor.
(With files from Reuters)