Tag Archives: Kyrgyzstan

Interview: Gold-plated resiliance in a tough year

>> Artem Volynets, the CEO of AIM-listed Chaarat Gold, had to deal wtih war and a coup in 2020, on top of the global pandemic.

JUNE 16 2021 (The Bulletin) — A global pandemic meant a tough 2020 for most people but for Artem Volynets, the CEO of AIM-listed gold miner Chaarat Gold, it was just one issue that he had to deal with. He also had to navigate a war and a coup.

“Yes, it was a complicated time,” he told The Bulletin over lunch in central London, flashing a pearl-white, relaxed, smile. 

“But in many ways it made us stronger as a company.”

Chaarat Gold is the owner of the Kapan gold mine in southeast Armenia and two gold concessions in Kyrgyzstan, Tulkubash and Kyzyltash. In 2020, Armenia lost a war to Azerbaijan for the disputed region of Nagorno-Karabakh and in Kyrgyzstan, a coup in October overthrew the government.

Volynets said that a third of his 1,000-person workforce at the Soviet-era Kapan gold mine was called up for active duty.

“Even so, if anything our reputation in the region was strengthened by the war,” he said. “We were the ones paying the taxes, keeping production going and jobs open.”

Chaarat Gold bought the Kapan mine from Russia’s Polymetal in 2019 for $55m, a deal that Volynets said had proved to be good value. 

He dodged discussing criticism of Armenian PM Nikol Pashinyan for allegedly dragging his feet over clearing protesters who have blocked access to another foreign-owned gold mine at Amulsar, but he was keen to discuss the expropriation in Kyrgyzstan of the Kumtor gold mine, the biggest in the country, from its Toronto-based owners, Centerra Gold.

Western investors in Bishkek have now described Kyrgyzstan as an “investment pariah” but Volynets was more circumspect.

“It’s very much an isolated incident that has to do with one particular foreign investor and one particular project,” he said. “We have been assured that we have no problems.”

Still, the noise around the expropriation of Kumtor has made life more difficult for Volynets and Chaarat Gold. Last month it said that raising finance for its Tulkubash project had slowed and that its first gold production was now delayed by a year to the second half of 2023.

In 2018, Chaarat Gold had offered to buy Kumtor, but Centerra Gold had turned down the offer.

“We’re not interested in it any more but we are still looking around at other FSU projects,” Volynets said.

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— This story was published in issue 48 of the Central Asia & South Caucasus Bulletin, on June 16 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Centerra Gold says it wants to negotiate with Kyrgyz government

JUNE 15 2021 (The Bulletin) — In an interview with the Bloomberg news agency, Scott Perry, the CEO of Centerra Gold, said that he wanted to negotiate a “divorce” settlement with the Kyrgyz government for the Kumtor gold mine which Kyrgyz officials expropriated in May. The Kyrgyz government also owns a 26% stake in Centerra Gold.

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— This story was published in issue 48 of the Central Asia & South Caucasus Bulletin, on June 16 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Erdogan flaunts his power in Central Asia and the South Caucasus

BAKU/JUNE 15 2021 (The Bulletin) — Turkish Pres. Recep Tayyip Erdogan showed off the influence he has built up in the region by visiting a town captured by Azerbaijan in a war against Armenia last year and by hosting Kyrgyz Pres. Sadyr Japarov for only his second visit to a foreign leader outside Central Asia since grabbing power in October.

With Azerbaijani Pres. Ilham Aliyev by his side Mr Erdogan toured Shusha, Azerbaijan’s biggest trophy from its victory over Armenia for control of Nagorno-Karabakh, in what some analysts described as a victory lap.

Turkey helped Azerbaijan in the war, supplying drones and military advisers. In return, it now has a permanent military presence in Azerbaijan and can count on Baku’s staunch loyalty.

“We call on everyone, who has an influence on the region, to see the facts, acknowledge the Azerbaijani people’s victory and look to the future,” Mr Erdogan said after signing the ‘Shusha Declaration’ with Mr Aliyev. Armenia criticised his visit to Shusha as provocative.

On June 9, Mr Japarov, the Kyrgyz president, had flown to Ankara to meet with Mr Erdogan. Other than two meetings with Russia’s Pres. Vladimir Putin, this was his first trip outside Central Asia since taking power last year. At their meeting, the two leaders talked up relations and the threat from Gulenists, followers of an exiled cleric that Mr Erdogan blames for a failed coup in 2016. 

There was no mention, though, of Orhan Inandi, a Kyrgyz-Turkish Gulenist businessman and educator who disappeared in Bishkek in May. His wife has said that Turkish security forces abducted him and are holding him in the Turkish embassy in Bishkek.

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— This story was published in issue 48 of the Central Asia & South Caucasus Bulletin, on June 16 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

IMF says that Kumtor row could damage Kyrgyz economy

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.

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— 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

Kazakh Central Bank keeps interest rates steady

JUNE 9 2021 (The Bulletin) — The Kazakh Central Bank kept its interest rate at 9% because of higher-than-hoped-for inflation. It said that inflation will exceed its 4-6% target corridor this year because of high commodity prices but that GDP growth would be between 3.6% and 3.9%, a slight rise on an earlier estimate.

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— 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

China to build Belt and Road terminal in Kyrgyzstan

BISHKEK/JUNE 7 2021 (The Bulletin) — China signed a deal to finance the development of a $100m industrial sector in Kyrgyzstan a few days after Pres. Xi Jinping telephoned Kazakh Pres. Kassym-Jomart Tokayev to talk up the prospect of deeper relations.

The industrial sector deal highlights China’s status as Kyrgyzstan’s biggest financial backer and cements the importance of its Belt and Road Initiative (BRI) for Central Asia.

According to press reports, “investors” from China will pay $20m initially to develop the Silk Way Industrial Park with subsequent payments pushing up total investment to $100m.

The 70 hectare site on the border with Kazakhstan, 30km from Manas International Airport, is considered by China to be a key part of its BRI project to boost East-West trade. The BRI hinges on building infrastructure across the region which has allowed China to increase its influence. In May, China said that it would boost aid to Kyrgyzstan and this week media reported that, in a phone call, Chinese Pres. Xi told Kazakh Pres. Tokayev that relations needed to “advance in the right direction”.

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— 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

Japarov gears up for fight with judicary in Kyrgyzstan

JUNE 7 2021 (The Bulletin) — Kyrgyz President Sadyr Japarov appeared to be gearing up to replace much of the senior judiciary in the country after he issued a statement criticising their work. He said that the unprofessionalism of judges was holding back the development of society. Mr Japarov, who took power in a coup in October, has earned a reputation as a single-minded populist who has consolidated his power through an election, tweaks to the constitution and the expropriation of a gold mine.

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— 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

Abducted eductionalist held in Turkish embassy in Bishkek, says wife

JUNE 6 2021 (The Bulletin) — Orhan Inandi, the Turkish educator and opposition figure, is being held captive at the Turkish embassy in Bishkek, his wife, Reyhan, said in a Twitter video. Mr Inandi disappeared on May 31 in an apparent abduction. His supporters have said that Turkish security forces kidnapped him. Turkish Pres. Recep Tayyip Erdogan blames supporters of the exiled cleric Fethullah Gulen for a failed coup attempt in 2016 and has vowed to track them down. Mr Inandi, who holds Turkish and Kyrgyz citizenship, is head of the Gulenist network of schools and universities in Kyrgyzstan.

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— 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

Coronavirus rips into region’s economies

MARCH 11 (The Bulletin) — Fresh economic data showed the impact of the coronavirus pandemic on the economies of Central Asia and the South Caucasus. In Kyrgyzstan, the National Statistics Committee said that the economy was 8.9% smaller in Jan. and February this year compared to the same period in 2020; in Kazakhstan, economy minister Aset Iragliev said that GDP had shrunk by 2.9% in the year to end-Feb; in Azerbaijan, the State Statistics Agency said that the economy was 3.2% smaller now than last year.

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— This story was published in issue 475 of the Central Asia & South Caucasus Bulletin, on March 15 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Marks & Spencer says to set up retail websites for Uzbekistan and Kyrgyzstan

MARCH 9 (The Bulletin) — British retailer Marks & Spencer said that it was launching websites in 46 new markets to sell its clothes, including in Uzbekistan and Kyrgyzstan. The expansion is part of a plan by Marks & Spencer to wring more value out of its brand from international markets. By opening websites targeting consumers in Kyrgyzstan and Uzbekistan, Marks & Spencer is acknowledging that both markets have matured. Marks & Spencer has operated shops in Baku and Almaty since 2014 and 2012.  

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— This story was published in issue 475 of the Central Asia & South Caucasus Bulletin, on March 15 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021