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Kumtor. Evolution of negotiations

It has taken long 15 years to reach an agreement on the largest investment project that would meet the interests of Kyrgyzstan. The government of Sapar Isakov managed to achieve that neither his predecessors, nor the parliamentary convocations, nor the presidents had managed to do.

Transformation of interests and whetting of appetite

This had happened for various reasons: Kumtor was a source of personal enrichment, «a golden feeder» for somebody, for the others — a way to get political points through speculation on the blessed Kumtor «soil.» The others held off on the decision. Either they were afraid of taking responsibility, or simply did not know which side to approach — incompetent «staff.» We will not point with finger. Everyone will recognize himself.

For a long time, the work of the gold mining enterprise in the republic had been hit by loud and prolonged scandals. The worst agreement on the project was the agreement with Cameco dated 2003, when Kyrgyzstan exchanged its initial stake in Kumtor — 67 percent — for 33 percent of shares in the created Centerra Gold.

Six months later, the Kyrgyz partner sold 7.5 million shares. The republic’s budget, they said, was replenished by $ 86 million, but our share in the project was a little more than 16 percent.

Demanding to restore «historical justice,» in 2009, the authorities achieved a revision of «the unprofitable and corrupt agreement.»

According to the new agreements fixed by the Parliament, the Constitutional Court and the Ministry of Justice, the share of the republic increased to 32.74 percent, and the Kyrgyz side eventually became the holder of the largest block of securities in Centerra, which, by the way, will bring a considerable bonus to the country in the foreseeable future.

By opening promising mines abroad, the Canadians lead the Kyrgyz partner to the rank of a significant player in the world gold market.

As the largest shareholder of the company, Kyrgyzstan will receive dividends, without exerting any effort and without deafening the nature by mining operations, which, if to believe the caring for the environment, is more expensive and more important than any precious metal. In short, a favorite option for many: fill the belly, and save the sheep.

The things they offered

The feeling of satisfaction turned out to be not long. In 2012, negotiations on Kumtor project resumed, lasting for five years. Like a capricious bride, Kyrgyzstan sorted out proposals one by one.

The Satybaldiyev’s idea of ​​creating a joint venture with an equal division of shares was ultimately rejected.

«Should we make a coup in Centerra’s board of directors (we can do it!) and introduce our own people from Britain — they asked for it very much!»- even such proposal was voiced. But there was enough wisdom to extinguish the revolutionary impulse.

«Or even more — let’s better nationalize Kumtor !? We have brought up specialists. We’ll seize the equipment. Let’s do it ourselves!»

And so on, and so forth.

While they were sorting out the prime ministers with their options, Kumtor was roiled by rallies, accompanied by arsons and brave dzhigits on horses. The Kyrgyz courts granted the claims of the state bodies, forcing the foreign company to seek justice in international arbitration. And environmental activists were doing the usual thing, rocking the ecological issue boat.

It seemed to be a dead end.

What we got and who gets in the way of the last agreement

The team of Sooronbai Jeenbekov, who started constructive talks with Centerra when being the prime minister, and the government of Sapar Isakov, who continued and brought the painstaking work to its logical conclusion, know how much efforts it cost to break the vicious circle.

In the fall of 2017, the Cabinet of Ministers signed a new strategic agreement on Kumtor project, the key points of which were the impressive investments by Centerra into Kyrgyzstan’s social projects, totaling $60 million and a tenfold increase in annual environmental payments from $ 310,000 to $ 3 million.

At least $ 50 million will be used for reconstruction and construction of modern treatment facilities in the water area of ​ Issyk-Kul lake.

The company has already allocated $ 7 out of $ 10 millions for the purchase of a linear accelerator for the treatment of cancer patients. The money was transferred to the account of the Fund for the Support of the Oncology Service, created by a government decree. Unfortunately, the tender for the purchase of the equipment has not yet taken place.

In the future, the investor agreed to finance additional geological exploration work on the undiscovered sections of the field. As a result, the life of the mine will not end in 2026, and thanks to Kumtor, tax deductions will continue to come into the budget for many years, and the workers of the enterprise, employing about 5,000 local specialists, will continue to feed their families.

What’s wrong?

Whether the hands are long — give modern equipment, different payments and the long-awaited 67 percent, or it is another political game, trying to squeeze out the current young prime minister, but the voices of the dissatisfied sound and are growing stronger again.

And how we wanted to believe that all disagreements, disputes and battles were left behind. But no! The path of destruction and confusion is luring, leaving the ashes on the blackened earth and large ugly holes in the country’s investment reputation.