Kyrgyzstan ‘open to out-of-court settlement’ in gold mine row

BISHKEK: Kyrgyzstan is open to settling its differences with the Canadian investor that operated its giant Kumtor gold mine before the authorities took it over earlier this year, a top official said on Wednesday.

Kyrgyzstan justified its May seizure of the mine, which accounted for 12.5 per cent of GDP in 2020, by citing company Centerra Gold’s alleged violations of environmental laws and safety norms.

Centerra has strongly denied the accusations and the two parties are currently locked in international arbitration proceedings in Stockholm.

Deputy chairman of the Cabinet of Ministers Edil Baisalov said in a statement early Wednesday that Kyrgyzstan is “open to reaching an out-of-court settlement that satisfies all parties”.

“However, we are also ready to pursue legal arbitration to its proper and just conclusion,” he added.

Baisalov said that the government investigators “continue to investigate compelling evidence of corruption involving Centerra from 2004”, as well as other alleged violations. Centerra has called the investigation an excuse to justify the mine’s nationalisation.

In September the company warned that since its eviction, the Kyrgyz authorities have “failed to adequately protect the mine’s infrastructure from flooding and other threats and may be facing production difficulties”.

Kumtor plays a central role in the former Soviet state’s largely agrarian economy, and has proved a point of contention in struggles between jostling political factions over the years.

Sadyr Japarov, whose dramatic rise from a prison cell to the presidency at the beginning of the year spelled bad news for Centerra, had called for the gold mine’s nationalisation when he was in opposition.

Jailed for organising the kidnap of an official, Japarov has always insisted the case was trumped up to punish him for the nationalisation campaign.

The populist was freed last year during a period of political turmoil.

Ongoing criminal investigations into alleged misdoings at Kumtor have also seen several former prime ministers detained.

The country’s first president Askar Akayev, who in 2005 became the first of three post-independence Kyrgyz leaders to be jettisoned from office, amid street protests, has twice flown in for questioning from his de facto exile in Russia.

He was not detained during either trip, but remains under investigation, the national security committee said in a press release on Tuesday.

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