Wednesday, June 27, 2012 -
Kyrgyz deputies voted on Wednesday to increase the government's stake in the Kumtor gold mine, owned and operated by Canadian mining firm Centerra Gold.
The cash-strapped Kyrgyz government has a 33 percent slice of the project, which generates around 12 percent of its national revenues.
Deputies approved by 67 votes to 11 the decree, Canada’s The Globe and Mail reported.
The MPs who voted for the revision challenged the legality of the operating agreement finalized in 2009 and says it was unfairly weighed against Kyrgyzstan.
A damning state commission report, which provided the basis for the parliamentary discussions, listed a litany of alleged environmental abuses committed by the miner and called for outright revocation of the license.
Centerra Gold President and CEO Ian Atkinson responded in a statement: “Centerra believes that the parliamentary report’s findings are without merit.”
“Kumtor has operated in full compliance with Kyrgyz and international standards and this has been proven over the years in systematic audits by Kyrgyz and international experts,” he said in a response posted on the company’s web site.
“The resolution is not legally binding on the Kyrgyz government and that the government cannot revoke its decrees and licenses without meeting the relevant criteria for revocation set out under applicable law,” the statement reads.
Analysts say Kyrgyzstan’s attempt to forcibly acquire a larger piece of the lucrative pie will further damage the country’s already poor reputation in the eyes of foreign investors.