Kyrgyzstan in full control of Kumtor gold mine
Authorities in Kyrgyzstan said they are in full control of the giant Kumtor gold mine after taking over management of the mine from Canada's Centerra Gold (CG.TO) which has taken legal action over the seizure.
Kumtor, the largest foreign investment project in
Kyrgyzstan, was operated by Centerra Gold until last month when Kyrgyz
lawmakers passed a law giving the state power to temporarily take control of
the mine and appoint "external management" to address alleged
environmental and safety problems.
The move came months after nationalist politician Sadyr
Japarov, a long-time supporter of Kumtor nationalisation, won a landslide
victory in a presidential election in January. read more
"All units are working without interruptions at the
moment," Nurdin Usenov, acting chief production officer at the mine, told
reporters during a government-sponsored media tour to Kumtor last Friday.
The mine will stick to output plans approved under Centerra
Gold, he said, which amounted to 470,000 to 510,000 ounces, or 14.62 to 15.86
tonnes, this year.
Centerra Gold said this week its Kyrgyz units, Kumtor Gold
Co and Kumtor Operating Co, had commenced bankruptcy proceedings in a U.S.
court following the nationalisation of the mine by the former Soviet republic.
Kyrgyzstan has a long history of disputes with Centerra Gold
over how to share profits from the country's biggest industrial enterprise.
Dinara Kutmanova, the head of state environment and climate
committee, said during the media tour the operator of one of the world's
highest-altitude mines had damaged nearby glaciers by dumping more than a
billion tonnes of waste rock there.
Scott Perry, Centerra Gold president and chief executive,
said the accusations were without merit.
"If you look at our operating activities ... it's
approved annually by the government's regulatory authorities and related
agencies and they've never asked us to make any changes to the way we operate
the mine," he told Reuters in an interview.
"Unfortunately I have to say that it really appears to
be a concerted effort to falsely justify a nationalisation of the mine."
Centerra said bankruptcy proceedings would prevent further efforts
by the Kyrgyz government to strip Kumtor Gold of its assets or otherwise
"improperly dispose" of the Kumtor mine in violation of its
investment agreements with the company.
The company had earlier initiated international arbitration
proceedings against Bishkek.
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