Kyrgyzstan to decide fate of Canadian-owned gold mine

The 300-page report his commission published alleged that operations at
Kumtor, an open cast mine lying at 4,000m, had thawed a nearby glacier,
poisoned streams that feed one of Kyrgyzstan’s main rivers and killed rare
plant species.

Kyrgyzstan
is one of the poorest Central Asian states. It is mountainous with few
national resources, making Kumtor a vital economic pillar. The mine accounts
for around 60 percent of Kyrgyzstan’s industrial output and about 12 percent
of its national income.

Earlier this year, Centerra Gold reduced expected output from the mine because
of ice movement in the pit, causing Kyrgyzstan’s 2012 national income
predictions to fall.

For Nato countries, including Britain, it is vital that Kyrgyzstan, which has
a reputation for volatility, remains stable while it withdraws military
equipment from Afghanistan from 2014 through Central Asia.

The Kyrgyz government already owns a third of Centerra Gold but nationalising
the mine would send shockwaves through the country’s small group of
international investors.

Even among prominent Kyrgyz, opinion is divided.

Orozbek Duisheyev, chairman of Kyrgyzstan’s association of miners and
geologists, said that the international investors would sue the country if
it nationalised the mine.

“If we follow this path, then we would have to pay $5 billion in
compensation, while Kumtor will be standing idle,” he told Reuters news
agency.

“We would not be able to run this project on our own.”

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