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Akayev Asks for Forgiveness Over Kumtor, Flies Back to Russia

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Akayev Asks for Forgiveness Over Kumtor, Flies Back to Russia

Kyrgyzstan’s first president admitted to making mistakes regarding the mine.

Akayev Asks for Forgiveness Over Kumtor, Flies Back to Russia
Credit: Depositphotos

After a week in Kyrgyzstan, the country’s first (and first ousted) president returned to Russia. Askar Akayev, who ruled Kyrgyzstan from 1990 to 2005, made a surprise return to the country in early August for the first time since being overthrown. Akayev flew from Moscow to Bishkek on August 2 to cooperate with the Kyrgyz government’s investigation into the Kumtor Gold Mine.

In early July, the head of Kyrgyzstan’s State Committee for National Security (SCNS), Kamchybek Tashiev, said that the government had added Akayev and Kyrgyzstan’s other exiled ousted president, Kurmanbek Bakiyev, to the growing list of wanted persons in connection to corruption at mine. 

Akayev issued a video statement on August 8 in which he asked the Kyrgyz people for forgiveness.

Construction on the Kumtor Gold Mine began in 1993, after a 1992 agreement between the newly independent Kyrgyzstan and a Canadian mining company, Cameco. The Kumtor Operating Company was also established in 1993, as a wholly owned subsidiary of Cameco, to operate the mine. Mining operations began in 1997. 

As Bruce Pannier of RFE/RL recounted in an article earlier this year, in 2003, the Kyrgyz government established a commission to revise the state’s contract with Cameco; meanwhile, Cameco sought to sell off its stakes in Kumtor to Centerra Gold, another Canadian mining firm. At the time, Cameco had a 33 percent stake and Kyrgyzaltyn, the state-owned gold refining company, had a 67 percent stake. In 2004, the ownership structure of the mine changed, with Centerra acquiring stakes from both Cameco and Kyrgyzaltyn, in exchange for Cameco and Kyrgyzaltyn gaining shares in Centerra. 

The deals left Kyrgyzaltyn with a 33 percent stake in Kumtor, in addition to its shares in Centerra. At present, Kyrgyzaltyn is the largest shareholder in Centerra, with a 26.1 stake. In 2009, Cameco divested its Centerra holdings and exited the Kumtor saga.

Most of the above occurred under the presidency of Akayev, thus his begging for forgiveness and his importance to the Kyrgyz government’s crafting of a narrative against Centerra. 

“Since the agreement was signed on Kumtor, Kyrgyzstan has made many decisions that supported the interests of Canada’s [Centerra Gold] company, leaving Kyrgyzstan’s interests behind,” Akayev said in the video. He went on to say, “The decision to give the mine to the Canadian party did not give any dividends to Kyrgyzstan; the state treasury did not get taxes. It was also my mistake, as I was then the president and it was I who made decisions regarding Kumtor.”

Centerra Gold sings a different tune. In a “Myth vs Fact” press release put out in July, the company underscores its argument that the Kyrgyz government’s  “seizure of the Kumtor Mine is based on false and misleading allegations.”

Among those allegations are those boosted by Akayev’s comment that the mine has given nothing to Kyrgyzstan.

According to Centerra, between 1994 and 2020, the company “contributed more than US$4.48 billion to the Kyrgyz Republic’s economy, including US$1.4 billion paid to the Kyrgyz government in taxes, customs and other duties.”

Kumtor is Kyrgyzstan’s largest non-state employer and the vast majority of its full-time workforce are Kyrgyz citizens. 

The more significant allegations against the company relate to environmental damage. In 2009, the Kyrgyz government signed a new agreement with Centerra, as Cameco fully left the Kumtor stage. Pannier noted that the 2009 agreement “allowed the Kumtor operation to dump the waste from the mine on the glaciers.” According to Centerra, that practice (which they stress was agreed to by previous Kyrgyz governments) was stopped in 2014.

Akayev in his video message admits to making mistakes in his government’s handling of the Kumtor mine and the Canadian partners. There’s certainly a narrative value to this for populist Kyrgyz President Sadyr Japarov: Poor Akayev, fooled by those tricksy Canadians who have stolen Kyrgyz wealth! But Akayev saying it was a mistake to sign an agreement is hardly a legal case for the agreement’s nullification. It’s not much of a sound argument in an arbitration court, which would look at what agreements were signed and whether the involved parties held up their ends of those agreement. It having been a bad deal for Kyrgyzstan isn’t necessarily relevant in that context. 

But arguably it is the domestic context, which concerns Japarov most, and fighting those big bad foreign investors who stripped Kyrgyzstan of its wealth distracts from Kyrgyzstan’s very real economic and social problems, all worsened by the ongoing COVID-19 pandemic. And never mind those Kyrgyz officials and elites who have gotten rich while the country stays poor. 

According to one associate of Akayev’s, as reported by RFE/RL’s Kyrgyz Service, Akayev is welcome to return to Kyrgyzstan whenever he wants.