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Kumtor developments: Government officials of Canada issue statement

Marc Garneau, Minister of Foreign Affairs and Mary Ng, Minister of Small Business, Export Promotion and International Trade, issued a statement on recent developments in the mining sector of Kyrgyzstan. It was sent out by the press service of the Government of Canada.

«As a significant investment partner of the Kyrgyz Republic, Canada is very concerned about continued developments in the mining sector. 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, and statements made during the parliamentary session that Kyrgyz control will be sought over a publically traded Canadian-based company with multiple international assets. This will potentially have far-reaching consequences on foreign direct investment in the Kyrgyz Republic,» the statement says.

The ministers also noted that Canada is also disappointed that this dispute between foreign investors and the Government of the Kyrgyz Republic was not allowed to be resolved transparently by the parties working together.

«Full economic recovery from COVID-19 requires a transparent and fair business environment. Measures such as this that have the potential to reduce trade and foreign direct investment will further undermine the economic livelihoods of the Kyrgyz people,» Marc Garneau and Mary Ng concluded.

Centerra’s offices in the country have been searched and documents were seized last weekend.

The court fined the Canadian company $ 3 billion, sued for $ 170 million in taxes and passed a new law that allows imposition of external management on the company. In February, the Parliament of Kyrgyzstan created a state commission to check the work of Kumtor gold mining enterprise.

Centerra Gold Inc. has already announced the start of arbitration proceeding against the government of Kyrgyzstan. Centerra also intends to hold the Government accountable in the arbitration for any and all losses and damage that result from its recent actions against KGC and the Kumtor mine if no resolution is reached.

The Consulate of Canada and the British Embassy in the Kyrgyz Republic issued a joint statement on situation in the mining sector last week, warning the government of Kyrgyzstan that «measures that affect trade and foreign direct investment will further undermine the already fragile economic livelihoods of the Kyrgyz people.»

The European Bank for Reconstruction and Development, which has worked with Kyrgyzstan and other central Asian countries on a number of projects, expressed its concern over the possibility of a state takeover of Kumtor Gold Company.