The European Bank for Reconstruction and Development (EBRD) made a statement on situation around Kumtor mine in Kyrgyzstan.
It is noted that the international financial institution is deeply concerned that the Parliament of Kyrgyzstan could on May 17 decide to begin the process of a state take-over of Kumtor Gold Company.
«We believe that any such decision would put in doubt the commitment of the Kyrgyz Republic to stand by its obligations to its international partners and foreign investors. It risks the country’s economic recovery and its reputation as a secure place for investors to operate,» the statement says.
The EBRD will work with its shareholders, other international financial institutions and the foreign and domestic business community to highlight the negative consequences of such a course of action and to mitigate its impact.
The EBRD is committed to working with the Kyrgyz authorities on improving the business climate and investing to change people’s lives for the better.
Earlier, the deputies adopted a law allowing imposing external management at the enterprise. In addition, there is a court decision to recover a compensation in the amount of more than $ 3 billion for environmental damage from the company.
Centerra Gold Inc. announced that it became aware of a number of legal and political developments in Kyrgyzstan that may have an impact on the ownership and its rights of Kumtor mine under the revised 2009 project agreements.
Accordingly, the company understands that the adopted law on external management would apply in circumstances where Kumtor Gold Company (KGC) violates certain Kyrgyz laws relating to safety and thereby creates an immediate threat to the life or health of people:
- Prohibits KGC’s managers from managing the mine (or else face criminal sanctions);
- And enables the Prime Minister of the Kyrgyz Republic to appoint an external manager to take control of all management activities of KGC, including its bank accounts.
