BISHKEK/JULY 28 2021 (The Bulletin) — — Citing Kyrgyzstan’s worsening economic outlook, economy minister Akylbek Japarov said that he wanted emergency powers for three months that would bypass Parliament and allow the government to raise extra cash for its budget by giving it more rights to fine companies and more oversight over customs and licensing regulations.

Observers, though, said that the proposals would damage Kyrgyzstan’s already tarnished repuation as a place to do business, – dented by rising unemployment linked to the pandemic, a coup last year and the expropriation of the Kumtor gold mine from its Canadian owners.

Mr Japarov, who led an investigation into environmental damage at Kumtor in May that triggered a $3.1b fine and the expropriation of the mine, said that the emergency powers were needed to give the government more flexibility.

“We will be able to take preventive measures to improve the economic situation before people become discontent and start to protest,” he said.

“We suggest that in special cases decisions can be made with subsequent changes and additions and that 10% additions can be added to the revenue and expenditure side of the
budget.”

Commenting on the proposed emergency budget laws, Robin Ord Smith, Kyrgyzstan’s Business
Ombudsman, said that the laws were being rushed through without proper scrutiny.

“Our initial assessment of this draft legislation identifies some potential issues that could have a
negative impact on business entities and economic recovery,” he said.

ENDS

— This story was published in issue 494 of the Central Asia & South Caucasus Bulletin, on July 29 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

JULY 27 2021 (The Bulletin) — Charaart Gold CEO Artem Volynets said that despite the expropriation of the Kumtor gold mine by the Kyrgyz government from Toronto-registered Centerra Gold, funding for its own project in Kyrgyzstan was moving along swiftly. In June, Chaarat Gold said that media publicity over the expropriation of Kumtor had damaged fundraising for its Tulkubash gold deposit. Charaat Gold said that it expected first gold to be produced in H2 2023, as planned.

ENDS

— This story was published in issue 494 of the Central Asia & South Caucasus Bulletin, on Jul7 29 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

JULY 21 2021 (The Bulletin) — A court in the US has ruled that the Kyrgyz government was in contempt of court for continuing to prosecute the Toronto-based company Centerra Gold for environmental damage at the Kumtor gold mine in Kyrgyzstan, Centerra Gold said. The Kyrgyz government has expropriated the mine, although Centerra Gold said it will challenge this expropriation in US courts.

ENDS

— This story was published in issue 493 of the Central Asia & South Caucasus Bulletin, on July 22 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

JULY 21 2021 (The Bulletin) — A court in the US has ruled that the Kyrgyz government was in contempt of court for continuing to prosecute the Toronto-based company Centerra Gold for environmental damage at the Kumtor gold mine in Kyrgyzstan, Centerra Gold said. The Kyrgyz government has expropriated the mine, although Centerra Gold said it will challenge this expropriation in US courts.

ENDS

— This story was published in issue 493 of the Central Asia & South Caucasus Bulletin, on July 21 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

JULY 7 2021 (The Bulletin) —Centerra Gold, the Toronto-listed mining company, filed more arbitration claims against the Kyrgyz government for its expropriation of the Kumtor gold mine in May (July 7). Centerra Gold has contested the Kyrgyz government’s accusation of environmental damage which it used to expropriate Kumtor, Kyrgyzstan’s biggest industrial project.

ENDS

— This story was published in issue 491 of the Central Asia & South Caucasus Bulletin, on July 7 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

JUNE 25 2021 (The Bulletin) — The Kyrgyz management now running the Kumtor gold mine in the east of the country said that the first month of operations after its expropriation on May 17 had been smooth. In a statement it said that it had sold 44,000 ounces of gold, restored Kumtor’s IT system which it said that its previous Canadian owners, Centerra Gold, had disabled, and paid all its staff. Centerra Gold is disputing the expropriation, justified by the government on environmental grounds.

ENDS

— This story was published in issue 490 of the Central Asia & South Caucasus Bulletin, on June 25 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

BISHKEK/JUNE 21 2021 (The Bulletin) — Russian businessman Alexander Lebedev toured the Kumtor gold mine in Kyrgyzstan, expropriated by the government from Canada-based Centerra Gold last month, on what he said was a fact-finding mission focused on environmental damage.

Some analysts have said that the Kyrgyz government may be looking to offload the Kumtor gold mine, Kyrgyzstan’s biggest industrial asset, to a friendly Russian company, although in comments on his Instagram account Mr Lebedev insisted that he was visiting the site in a personal capacity.

“Spent a whole day at the 4.5km altitude mountain gold mine Kumkor, where citizens of ‘honourable’ Canada have been for 20 years paying bribes to former local top officials, and causing enormous damage to the environment of Tian Shan range,” he wrote. Neither the Kyrgyz government nor Kumtor have commented. Centerra Gold denies the accusations.

The Kyrgyz government expropriated Kumtor last month after accusing it of massive environmental damage. Since then, Western businessmen have said that the expropriation has turned Kyrgyzstan into an “investment pariah”. The Kyrgyz government has said that it should be treated as an isolated case.

Mr Lebedev has never held any mining assets. The former KGB agent, who is considered to be close to Russian Pres. Vladimir Putin, has owned Russian airline Aeroflot, several newspapers and banks in Russia and the Evening Standard newspaper in London.

Despite the rise of China in Central Asia, Russia still holds the biggest influence. Since seizing power in a coup in October, Kyrgyz Pres. Sadyr Japarov has visited Mr Putin twice, the second time after he had completed the Kumtor expropriation.

ENDS

— This story was published in issue 489 of the Central Asia & South Caucasus Bulletin, on June 23 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

BISHKEK/JUNE 9 2021 (The Bulletin) — The IMF said that without a quick resolution to the row between Toronto-listed Centerra Gold and the Kyrgyz government over ownership of the country’s largest gold mine, Kyrgyzstan will miss its GDP estimates.

Conspicuously avoiding naming Centerra Gold or Kumtor, the gold mine at the centre of the row, the IMF also said in a statement that the expropriation of the mine undermined foreign investor confidence.

“Directors also stressed the criticality of political stability, policy predictability, and a market-friendly business environment,” the IMF’s executive said in comments on both a consultation session with Kyrgyz officials and also its GDP growth estimates for Kyrgyzstan of 3.8% this year and 6.4% in 2022.

“A speedy and transparent resolution of the ongoing commercial dispute with the largest foreign investor would be critical to ensure uninterrupted gold production while protecting the environment.”

The Kumtor gold mine is the lynchpin of the Kyrgyz economy, contributing up to 15% of its GDP.
Western investors based in Bishkek have said that the expropriation last month of the mine by the Kyrgyz government had turned Kyrgyzstan into an “investment pariah”. The government has justified its expropriation because of alleged environmental damage at Kumtor, an accusation that Centerra Gold disputes. Centerra Gold has launched international arbitration.

Despite the growing pressure, neither Pres. Sadyr Japarov nor senior Kyrgyz officials appear to be too concerned. Mr Japarov has not commented on the expropriation and has instead promoted the official who steered it to be the Kyrgyz economy minister. Officials have taken journalists on a press trip to Kumtor to show them how efficiently it is now being run.

ENDS

— This story was published in issue 487 of the Central Asia & South Caucasus Bulletin, on June 9 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021