Centerra Gold is a Canadian-based gold mining and exploration company engaged in the operation, exploration, development and acquisition of gold properties in Asia, the former Soviet Union and other emerging markets worldwide.
By Fozil Mashrab
Asia Times
A legal dispute between the Kyrgyzstan government and Centerra Gold has entered a decisive stage for both sides after the Kyrgyz parliament instructed the government either to renegotiate a 2009 deal with the Canadian mining company or withdraw its mining license, though Kyrgyz Prime Minister Jantoro Satybaldiev recently ruled out any steps to nationalize the mine.
The parliament’s instruction came in a February 22 resolution as Kyrgyz officials said that the previous deal between Kyrgyzstan and Centerra gave away overgenerous tax waivers and made other unnecessary concessions. Temir Sariev, the country’s economy minister, has said that the deal allows Centerra to pay 12% tax on its revenues while other mining companies in the country are required to pay a rate of between 17% to 20%. The 2009 deal was signed during the presidency of Kurmanbek Bakiev, who was ousted in a popular revolution in April of the following year.
Centerra has operated the Kumtor mine since 1993 through Kumtor Gold, a wholly owned subsidiary. Kumtor is one of the largest gold mines in the world, located in the Issik Kul region of Kyrgyzstan. Kumtor, which produces around 2 tons of gold a year, accounts for 12% of the country’s gross domestic product (GDP) and for about 50% of its exports. The mine is the largest taxpayer in the country.