28 may 2017

Central Asia news

Kumtor gold mine: Kyrgyzstan demands 20% in Centerra Gold or $480 million

20.07.2007 13:14 msk

Irina Yermakova

Business Kyrgyzstan

Negotiations between Centerra Gold and a special group set up by the government of Kyrgyzstan began in Bishkek earlier this week. Official Bishkek insists on a revision of the terms of the agreement (2003) under which Centerra Gold was founded in the first place. The Canadians have been mining Kumtor for gold since 1992 and leaving 70% of the yield to Kyrgyzstan. Once Centerra Gold was established, however, Bishkek found itself with just over 30% of the Kumtor gold. Nikolai Tanayev's government then sold some more stock and ended up with under 16% of Centerra Gold in its hands.

The special group negotiating the matter with the Canadians on behalf of the Kyrgyz government calls the 2003 agreement unfair and the sale of the stock illegitimate. As things stand, the Kyrgyz Republic owns just over 15% of Centerra Gold, the Canadians 53% (controlling interest), and minor shareholders about 32%.

The Kyrgyz began the talks with the demand that the Canadians turn over 20% of the stock or pay Bishkek $480 million as a recompense.

The Canadians were expected to give the answer immediately. They left for Toronto instead, supposedly for consultations with their own patrons.

Insiders say that the Canadians recognize validity and fairness of the Kyrgyz demands and that the sum of the recompense is the only issue that has to be addressed now.