Toronto-listed Centerra Gold engaged in long legal dispute
By David Trilling
Eurasia.org
As officials in Kyrgyzstan prepare to negotiate with their country’s largest investor in Bishkek this week, new details are emerging about how the Kyrgyz government wants to restructure the agreement covering operations at the country’s flagship gold mine.
Bishkek and Toronto-listed Centerra Gold are engaged in a protracted legal dispute over Kumtor, the largest gold mine operated by a Western company in Central Asia. Earlier this year, a Kyrgyz state commission claimed Centerra owes approximately $467 million for environmental damages. Then, in February, parliament gave Kyrgyz officials three months to negotiate a new operating agreement, which would be the third in 10 years.
Kyrgyz officials say the current agreement, negotiated under former president Kurmanbek Bakiyev in 2009, shortly before he was ousted amid violent street riots, was unfair. The company, which also operates a mine in Mongolia, argues that it negotiated in good faith with what was at the time the legitimate government, and has threatened to seek international arbitration. It calls the $467 million claim — which other miners in Bishkek say is a negotiating tactic — “exaggerated or without merit.” Centerra officials also point out that the agreement gave the company confidence to invest almost $1 billion in the mine since 2009.