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BISHKEK (TCA) — Canadian Centerra Gold Inc intends to invest about $25 million in further geological exploration to extend the life of the Kumtor gold mine in Kyrgyzstan, Chief Executive Officer of Centerra Gold Inc., Scott Perry, said during his meeting with Prime Minister of Kyrgyzstan Sapar Isakov on April 4. Continue reading
BISHKEK (TCA) — Gold production at the Kumtor mine in Kyrgyzstan in 2017 was 562,749 ounces or 17,503.46 kg. Gold sales in 2017 were 550,134 ounces or 17,111.09 kg with a revenue totaling $685.2 million. Contribution to the national budget in taxes and mandatory payments in 2017 was more than 8.7 billion soms, Kumtor Gold Company said on March 14. Continue reading
BISHKEK (TCA) — Kyrgyzstan’s gross domestic product in 2017 was 493 billion soms and increased by 4.5% compared to 2016, the National Statistical Committee of Kyrgyzstan said. The GDP growth was higher than the forecasts of the government and international financial institutions including the International Monetary Fund and the World Bank. At the end of 2016, the IMF and WB expected growth of no more than 3.5%. According to the conclusion of the IMF mission in November 2017, the country’s GDP was expected at 3.2%. The forecast for Kyrgyzstan’s economic growth was lowered by 0.3% due to the situation on the Kyrgyz-Kazakh border. Kyrgyzstan’s industrial output amounted to 231 billion soms last year and increased by 11.5% compared to 2016. The industry grew due to the growth of extraction of metal ores and crude oil, as well as production of plastic and food products including beverages and tobacco products. Dependence on Kumtor In early 2017, the GDP growth was very impressive — more than 7%. However, the year ended with an increase of 4.5% due to the impact of the operation of the Kumtor gold mine. The economy is still dependent on gold mining, while investors are not in a hurry to enter Kyrgyzstan. Dependence on one enterprise represents a significant risk to the economy. In 2018, the gold production will decrease at Kumtor, so it is likely that the current GDP may also change, experts say. One of the main events of 2017 was the signing of a new agreement on Kumtor between the government of Kyrgyzstan and Centerra Gold. In December 2017, it was 20 years since the development of the Kumtor mine started in the country. Over the years, several unsuccessful attempts have been made to conclude an agreement beneficial to the Kyrgyz side. Finally, in September 2017, the Kyrgyz government and Centerra signed a new agreement under which the Canadian company will allocate $50 million to the newly established Environmental Development Fund to finance environmental protection measures. The money will primarily be used for the modernization and construction of new modern treatment facilities in the water area of Lake Issyk-Kul. In addition, the annual environmental payment was increased to $3 million. The new agreement on Kumtor became a signal to foreign investors that they can enter the country. Industrial growth and trade The industrial growth indicators are encouraging. Earlier, mainly services and trade were developing, and the population received revenues from re-export. Currently, the country's economy is aimed at industrial production. Among the countries of the Eurasian Economic Union, the largest growth in industrial production in the ten months of 2017 was recorded in Kyrgyzstan — 13.7%, the Eurasian Economic Commission announced in December 2017. For 11 months of 2017, Kyrgyzstan's foreign trade amounted to $6 billion, 11% more compared to 2016. Exports increased by 12.8% and imports by 10.2%. The exports grew due to the increased exports of glass, butter, precious metals, non-monetary gold, and dried fruits. The country increased imports of fabrics, ceramic products,...
BISHKEK (TCA) — Kyrgyzstan’s Parliament has approved amendments to the country’s Water Code which allow the development of Davydov and Lysyi glaciers at the country’s largest gold deposit, Kumtor. The amendments are necessary for the State Agency for Environmental Protection and Forestry to permit further work at the deposit. The Government submitted the bill to the Parliament after Kyrgyzstan and Centerra Gold signed a new agreement on compliance with environmental standards in Kumtor’s development. Kumtor, the largest gold mine in Central Asia, is located in Kyrgyzstan’s Tien Shan mountains. Canada-based Centerra owns 100% of the Kumtor mine through its wholly owned subsidiary Kumtor Gold Company. The Kyrgyz Republic holds 26.6% shares in Centerra through the state gold company KyrgyzAltyn. Kyrgyzstan’s Government initiated amendments to the Water Code back in 2015 but under the pressure of society, the bill was withdrawn from Parliament. Civil society and environmentalists believe that the adoption of the document would legitimize the destruction of glaciers. Debates on the problem continue so far, and the public has divided into two camps. Some consider the adoption of the law necessary for the economy of the country, while others advocate the environment protection. Government’s arguments Due to amendments to the Water Code, the Government will be able to raise an additional 12.7 billion Kyrgyz soms ($182 million) for the development of the country's economy, said the then Deputy Prime Minister of Kyrgyzstan Duishenbek Zilaliev last week. In the first nine months of 2017, Kumtor contributed more than 6.8 billion soms in taxes and mandatory payments to the national budget of Kyrgyzstan, and more than $238 million in 2016. Kyrgyzstan received $10 million annually as dividends from its shares in Centerra valued at $415 million, he said. In addition, Kumtor will allocate a one-time $10 million payment for cancer treatment in the country. The company paid $310,000 for environmental damage annually but according to the recent agreement, the payment was increased to $3 million. Summing up all the money coming from Kumtor, 12.7 billion soms will be directed to the development of Kyrgyzstan’s economy. When the document is signed by the President, Centerra will be able to conduct a full-scale development in the areas of the Davydov and Lysyi glaciers. If Kumtor does not work, the glaciers will collapse into the quarry and the Government will have to clear it at its own expense, Zilaliyev explained. According to Chairman of the State Committee for Industry, Energy and Subsoil Use Ulanbek Ryskulov, it is impossible to exclude the excavation of ice during mining operations, because the ice masses were deformed towards the quarry and are dangerous for mining operations. They need to be moved to protect the quarry and to maintain safe working conditions. The Lysyi Glacier has been developed by 10% and it will be developed by 20% by the end of the mine operation, he added. The Davydov Glacier has been worked out at 45-50% (70% after completion). In the future, the Environmental Protection Agency will not allow mining...
BISHKEK (TCA) — Centerra Gold Inc., the Canadian-based gold mining company operating Kyrgyzstan’s Kumtor gold mine, on September 11 said that the Company and its Kyrgyz subsidiaries — Kumtor Gold Company (KGC) and Kumtor Operating Company (KOC) — have entered into a comprehensive settlement agreement with the Government of Kyrgyzstan. The Agreement, among others, provides for full and final resolution of all existing arbitral and environmental claims, disputes, proceedings and court orders, Centerra said. The existing 2009 agreements governing the Kumtor Project remain in full force and effect, including the tax and fiscal regime. KGC has agreed to make a one-time lump sum payment totaling US$57 million to a new, government-administered Nature Development Fund (US$50 million) and to a new, government administered Cancer Care Support Fund (US$7 million) and within 12 months of closing make a further one-time payment of US$3 million to the Cancer Care Support Fund. “First and foremost, this agreement is a comprehensive resolution to all of the outstanding matters affecting the Kumtor Project,” Scott Perry, Centerra Gold’s Chief Executive Officer, said after the signing of the agreement in Bishkek. “Our arrangement provides for the lifting of all restrictions on the freedom of movement of KGC employees as well as the restrictions on the ability of Kumtor to distribute funds to Centerra. The agreement also provides business certainty for future mining operations at the Kumtor Project, as it preserves all rights of the Company, KGC and KOC under the Kumtor Project Agreements and, in order to receive full payment, requires continued compliance by the Government with a number of conditions precedent that are designed to protect Centerra, KGC and KOC. Lastly, this agreement represents a symbol of commitment from Centerra and the Kyrgyz Republic Government, a commitment not only to stability for foreign investment in the Kyrgyz Republic but a commitment to the environment, health and wellbeing of the citizens of Kyrgyzstan.” Sapar Isakov, Prime Minister of the Kyrgyz Republic commented, "We are pleased to have worked together with Kumtor and the Company to reach a solution regarding the Kumtor Project. It is encouraging to see the Company's commitment to the environment with the establishment and funding of a new Nature Development Fund. This new fund will help finance environmental conservation and nature preservation projects throughout Kyrgyzstan going forward. Additionally, the Company has strengthened its social responsibility by committing to fund a new Cancer Care Support Fund with contributions up to US$10 million and to provide stronger annual contributions to the environment and to Kumtor's existing reclamation trust fund. With the resolution of all the outstanding matters regarding the Kumtor Project we have established a new beneficial relationship with our country's largest enterprise and can look forward to a climate of economic stability which will encourage further foreign investment to grow our economy."
BISHKEK (TCA) — "Kyrgyzstan should become a paradise for business, investors and for each entrepreneur, local and foreign, large and small," Kyrgyz President Almazbek Atambayev said at the fifth meeting of the National Sustainable Development Council of the Kyrgyz Republic. Continue reading
