Kyrgyz parliament to reconsider deal on Kumtor gold field
By Aynur Jafarova
A memorandum of understanding signed on the Kumtor gold project on September 9 by the Kyrgyz government, Kyrgyzaltyn Open Joint Stock Company and Canadian Centerra Gold Inc. was discussed at a joint session of the Kyrgyz parliament's committees for international affairs and agrarian policy, water resources, environment and regional development, Kyrgyz Telegraph Agency reported on September 16.
During the session, Deputy Prime Minister Joomart Otorbayev, Economy Minister Temir Sariyev, Justice Minister Almambet Shyshmamatov and the president of Kyrgyzaltyn, Dylger Japarov, briefed members of the committees on the negotiations with Centerra Gold Inc., as well as the environmental situation at the Kumtor field.
The deputy speaker of Kyrgyz parliament, Jyldyzkan Joldoshova, said that the memorandum should be reconsidered to increase Kyrgyzstan's share of the project to at least 70 percent from the current 50 percent.
The chairman of the international affairs committee, Bakhtiyar Kadyrov, also suggested that the parliament should reconsider the memorandum and make a final decision.
On September 9 the Kyrgyz government and Centerra Gold Inc. agreed to establish a joint venture on the development of the Kumtor field and to merge Kumtor Gold Company and Kumtor Operating Company.
According to the agreement, both sides will get 50 percent of the joint venture.
In May several hundred residents of the Issyk-Kul province blocked the main road to Kumtor, demanding that the field be nationalized to ensure more social benefits for the Central Asian nation.
The president of Kyrgyzaltyn, Dilger Japarov, said that if Kumtor is nationalized, Centerra Gold Inc. would be valued at $2 billion to $3 billion.
Japarov said that the investment fund and shareholders of Centerra Gold Inc. would take Kyrgyzstan to court if the government decides to nationalize the company.
"We can suffer losses due to the stoppage of work and judicial process," Japarov said.
The Kumtor gold field, operated by Toronto-based Centerra Gold, is the largest foreign-owned gold deposit in the former Soviet Union.
According to Centerra's website, it produced more than 8.4 million ounces of gold between 1997 and the end of 2011.