Duishenbek Zilaliev: Kyrgyzstan will only benefit from agreement with Centerra

«Having signed an agreement with Centerra, Kyrgyzstan will definitely benefit,» the Vice Prime Minister of Kyrgyzstan Duishenbek Zilaliev said, commenting on the agreement on Kumtor gold mine.

«First of all, we want to settle all environmental disputes. The company will pay $ 50 million as a lump sum for environmental activities in the water area of Issyk-Kul Lake. Environmental payments, which, in our opinion, were unfairly underestimated by 2009 agreement, will grow from $ 310,000 to $ 3 million. Other $ 10 million will be invested in modernization of cancer center — this is a very important social investment for the country — 18,000 Kyrgyz people die of cancer each year,» Deputy Prime Minister Duishenbek Zilaliev said during the visit to the mine.

According to him, the recultivation fund, which by the closure of the mine should have $ 69 million, will be renamed into a trust fund. All savings — $ 23 million so far — will be transferred from UK banks to Kyrgyzstan, so that in the future not less than 20 percent of these funds will work for the economy of our country, the official said.

«In addition, an agreement was reached to establish a joint venture with Centerra to conduct additional exploration work, for which the company plans to allocate $ 10 million. A citizen of Kyrgyzstan will be appointed to the leading position in this project who will control all financial expenses to exclude corruption risks,» the Vice Prime Minister said.

There is still a lot of work at Kumtor field. This is a gold-bearing area, exploration can be carried out in the untreated area of the mine.

Duishenbek Zilaliev

According to him, many mistakenly believe that all questions on Kumtor will end on this, but this is not so. «We are implementing only the first stage. The subject for further negotiations will be an increase in the share of Kyrgyzstan in the project,» the Deputy Prime Minister assured.

At the same time, in his opinion, the country has promising prospects with the acquisition by Centerra the North American mining company Thompson Creek.

«Initially, when our stake in Centerra after the deal was reduced to 26.6 percent, we also took the news negatively, but after studying the economic feasibility of the agreement and the arguments of local and foreign experts, we realized that this was a very profitable acquisition. Gold reserves of Thompson Creek amount to about 180 tons, copper — 991,000 tons. And if additional exploration on the flanks is made, one can extend the life of the field up to 30 years. Even if 10 years later Kumtor stops, we, as the main shareholder of Centerra, will receive profit in the form of dividends for other 20 years. This is a long-term investment,» Duishenbek Zilaliev summed up.