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Kumtor to continue to operate under terms of 2009 agreement

The Ministry of Economy and Commerce of Kyrgyzstan proposes to adopt a law regarding Kumtor. The document has already been submitted for public discussion.

The bill notes that after the mine came under state control, it is relevant to adopt a law regulating the exploitation of the mine. The document was adopted in order to recognize and approve for Kumtor Gold Company and Kumtor Operating Company the legal regime of activity established by the agreements of 2009. This includes maintaining the tax and customs regime, benefits and preferences.

Kumtor Gold Company CJSC and Kumtor Operating Company retain all rights, preferences and guarantees provided for in the agreement on new terms for Kumtor project and the revised agreements when selling their own shares to a public company that holds shares of these joint-stock companies.

«Confirmation of the preservation of the current regime of Kumtor project will make it possible to increase the attractiveness of the investment climate in the Kyrgyz Republic, and will generally increase the value of Kumtor as a unique project of strategic importance for the state’s economy,» the background statement says.

After signing the law, the Cabinet of Ministers must take measures to ensure and expand uninterrupted and efficient production at Kumtor project, as well as to attract external and internal additional funds for its development.

The Kumtor Agreement of 2009 established special conditions for work and payment of taxes. The company pays only one tax — on turnover and deducts funds to the fund of the Issyk-Kul region and for the development of the mineral resource base.