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Kyrgyzstan Mulling Nationalization of Key Gold Mine President

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Kyrgyzstan is considering nationalizing a controversial foreign-controlled gold mine that has been at the heart of destabilizing political tensions, the country’s president has told the BBC in an interview.

MOSCOW, November 7 (RIA Novosti) – Kyrgyzstan is considering nationalizing a controversial foreign-controlled gold mine that has been at the heart of destabilizing political tensions, the country’s president has told the BBC in an interview.

President Almazbek Atambayev told the BBC Kyrgyz Service that nationalization was being considered despite the economic fallout that the move would cause the impoverished Central Asian nation.

The Kumtor mine, which holds estimated deposits of at least 700 tons of gold, has for the past year been subject of a tussle between Toronto-listed Centerra Gold and Kyrgyzstan, which wants to increase its stake in the project.

Government-opposed nationalists have argued volubly for the government to wrest greater control over the mine and several, sometimes violent, protests have taken place in support of that aim in the past few months.

Critics of Kumtor claim that the open-pit mine is harmful to the environment, an accusation that Centerra staunchly rejects.

Kumtor accounts for about one-tenth of the ex-Soviet republic’s economy and employs about 2,800 people, almost all Kyrgyz nationals, as of 2012. That is a relatively big number for a nation of 5.5 million people where rampant joblessness has driven hundreds of thousands abroad for work and where Soviet-era industry to a large extent lies in disrepair.

Kumtor is controlled by Centerra, which is in turn 33 percent owned by Kyrgyzstan’s government.

The government of Kyrgyzstan has responded to public pressure by successfully negotiating a deal to boost its control over the mine to 50 percent, but opponents of this solution in parliament say that it is not enough and want to see state ownership hiked to at least 67 percent.

Centerra chief executive Ian Atkinson last month told the Reuters news agency that minority shareholders could live with a 50-50 deal, but were unlikely to agree to any further dilution of their investments.

Atambayev told the BBC Kyrgyz Service that nationalization might be the only solution to lead the country out of the politically fraught impasse.

“Even if it is very hard and harmful for Kyrgyzstan, maybe, for the sake of pacifying people, we might take a harmful action … like nationalization,” Atambayev said in translated remarks on the BBC’s English-language website.

 

Tags:
Kumtor goldfield, Ian Atkinson, Almazbek Atambayev, Kyrgyzstan
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