The government initiates legal process in order to assume control of the mine operations for a period of three months
The mine is operated by Kumtor Gold Company (KGC).(Credit: Erik Stein from Pixabay)
The Kyrgyz Government has announced that it is taking steps to take temporary control of the Kumtor gold mine in the southern Tien Shan Metallogenic Belt.
A legal process has been initiated by the government in order to assume control of the mine operations for a period of three months, effective immediately.
The mine is operated by Kumtor Gold Company (KGC), a subsidiary of a Canadian-based mining company Centerra Gold.
The government’s move to assume to temporary control of Kumtor follows an investigation into the concerns raised by it over waste management and other environmental practices at the mine.
On 17 May, the Parliament of the Kyrgyz Republic adopted a resolution to install external management at the mine.
Responding to the developments, Centerra stated: “The Kyrgyz Government effectively seized control of the Kumtor Mine over the weekend of May 15 and 16, 2021 by sending Government authorities to the mine, KGC’s office in Bishkek and the homes of several KGC employees.
“Consequently, Centerra is no longer in control of the Kumtor Mine and can no longer ensure the safety of the mine’s employees or operations.”
Earlier, Centerra announced that it has initiated arbitration process against the Kyrgyz Government to enforce its rights under longstanding investment agreements with the government.
However, the company disclosed its willingness to engage in constructive talks with the government on the matter.
The company stated: “Centerra is concerned that these latest actions not only undermine the fundamental basis upon which the Kumtor Mine has been operated, but also put at risk the livelihoods of more than 2,700 employees, 99% of whom are Kyrgyz citizens, and the businesses of hundreds of local suppliers who support KGC operations.”
Earlier this year, Centerra announced plans to invest $2bn to extend the life of the Kumtor mine by five years to 2031.
The plan was estimated to add more than three million ounces (85 tonnes) of contained gold.
Recently, a district court in Kyrgyzstan has ordered Centerra Gold to pay $3.1bn after ruling that operations of its Kumtor mine had violated certain environmental laws of the country.