Last month, Tengiz Bolturuk said the financial situation at the Kumtor Gold Mine was “excellent.” Bolturuk is a former member of the Board of Directors of Centerra Gold and now serving as the Kyrgyz-government appointed external manager of the Kumtor Gold Mine following its seizure by the Kyrgyz state earlier this year. His comments came on the heels of a reported first meeting between Centerra and Kyrgyz officials after a months-long standoff from which few details have emerged.
The Kyrgyz side characterized the September 28-30 meetings as a win for Bishkek. Akylbek Japarov, at the time minister of economy and now head of the cabinet of ministers, said Centerra initiated the meeting and had agreed, in principle, to leave the mine to the Kyrgyz for the return of the Kyrgyz-held shares in Centerra (Kyrgyzstan is Centrra’s largest shareholder at 26 percent).
Centerra did not comment on the substance of the late September meeting, but a day before it had issued a press release stating it had made an “an application requesting urgent interim measures in its international arbitration” against Bishkek, specifically seeking to prevent Kyrgyzstan “from causing irreparable damage to the mine, destroying its integrity, value and long-term viability.” In that statement, Centerra said it was asking for an order directing Kyrgyz authorities to not deviate from the established mine plan, to refrain from transferring shares, and refrain from interfering in the ongoing arbitration.
It’s not clear if any urgent action was taken.
Then, this week in an emailed statement to Mining.com, Centerra claimed that gold output had fallen more than 24 percent below the company’s previously approved 2021 mine plan for June through September. “That means the external management poured about KGS 6.2 billion ($73.5 million) less gold, based on the average gold price for the period,” Centerra said.
In a graphic provided to Mining.com by the Canadian mining company, Centerra declared: “Kumtor mismanagement short changes the Kyrgyz people.”
As Mining.com reported:
Centerra wants to know where Kumtor’s missing gold is; why KGC hasn’t published any operating results since the government seized the mine; how the government intends to make up for falling gold production; who is buying the gold, and where are the proceeds are; how much is Tengiz Bolturuk [the current mine manager] being paid and why the government won’t allow an independent assessment of the condition of the mine.
In September, Kyrgyzstan was blocked from trading on London’s markets, after being suspended from the Independent Precious Metals Authority’s “Good Delivery List.”
In early October, as RFE/RL’s Kyrgyz Service reported, President Sadyr Japarov said in a Facebook post that “Gold will always find a market.”
On October 21, Centerra’s subsidiary, the Kumtor Gold Company (KGC), won court approval for a $8 million loan over the objection of Kyrgyz state authorities. Centerra had earlier filed for Chapter 11 bankruptcy in the United States in order to “to protect the interests” of the company and “prevent any further efforts by the Kyrgyz Government to strip” the mine of its assets.
Centerra is pursuing arbitration proceedings against Kyrgyzstan in Stockholm, Sweden under the rules of the United Nations Commission on International Trade Law (UNCITRAL). It’s not clear how swiftly that process will move. Related to the bankruptcy matter, a hearing is set for February in a U.S. bankruptcy court to consider Kyrgyzstan’s motion to dismiss that case.