Canada Warns Of Far-Reaching Effects On Kyrgyz Foreign Investment After Gold Mine Takeover

TORONTO (Pakistan Point News / Sputnik - 18th May, 2021) Canada warned Kyrgyzstan of substantial repercussions on foreign investment in the Central Asian country after Bishkek temporarily imposed external management on a Canadian-owned gold mine.

Earlier on Monday, Bishkek told RIA Novosti that the Kumtor Gold Company, owned by Canadian gold giant Centerra Gold, would be brought under government control for up to three months, with Kyrgyzstan's government citing the company's irresponsible environmental practices.

"We are disappointed with the decision taken at the extraordinary session of the Parliament of the Kyrgyz Republic on May 17 to move forward with the imposition of external management on the Kumtor Gold Company," Global Affairs Canada said in a statement on Monday afternoon. "This will potentially have far-reaching consequences on foreign direct investment in the Kyrgyz Republic."

Ottawa also voiced its disappointment that the dispute was not resolved in a transparent manner between the parties, adding that the post-pandemic recovery requires "transparent and fair business environment" and that Kyrgyz economic livelihoods could be undermined by the decision.

Centerra called the Bishek's decision a "clear violation" of its rights, saying that, while it is ready to pursue negotiation, it will protect company and shareholder interests through international arbitration.

Earlier on Monday, the Kygryz parliament's press service reported that the country filed a $4.2-billion lawsuit against Centerra Gold for allegedly violating environmental regulations and engaging in tax evasion. According to the Bishkek, the company's actions caused significant damage to the republic's ecology, including the threat of the collapse of glaciers in the vicinity of the mine, which can lead to human casualties.

Canadian Centerra Gold has been developing the largest Kumtor deposit in Kyrgyzstan with gold reserves of about 700 tons for about 30 years. The Kumtor field is the main asset of the international company, which generates most of its revenue. According to the National Statistical Committee of Kyrgyzstan, the share of Kumtor in the total industrial production of the republic is about 20 percent.