Asia

Kyrgyzstan president: Key goldmine may be nationalised

  • 7 November 2013
  • From the section Asia
The high-altitude Kumtor gold mine in Kyrgyzstan
The high-altitude Kumtor mine is at the centre of a long running controversy

Kyrgyzstan may seek to nationalise its largest foreign-run gold mine which has been at the centre of months of protests, President Atambayev has said.

In an interview with the BBC Kyrgyz Service, the president said that a long dispute over ownership of the Kumtor mine had turned into a political game.

There have been persistent protests demanding that Kyrgyzstan take a bigger share of the economically vital mine.

Run by Canadian based company Centerra, Kumtor is the backbone of the economy.

President Almazbek Atambayev said that nationalisation remained an option even though the economic consequences could be harmful.

In 2011 the Kumtor mine accounted for more than 10% of the country's GDP. It is also Kyrgyzstan's biggest employer, with over 3,000 people working there, most of them Kyrgyz nationals.

But a series of protests, riots and hunger strikes over the last year have put pressure on Centerra Gold and the Kyrgyz government to renegotiate an investment deal struck 10 years ago.

Kumtor is owned by Centerra, but the Kyrgyz government has a 33% stake in the company through its state agency Kyrgyzaltyn.

Both sides worked out a new deal in September with Kyrgyzstan agreeing to swap its shareholding for a 50% stake in a new joint venture.

But the agreement has been rejected by parliament which has called on the authorities to demand a 67% stake, something Centerra says it is unlikely to agree to.

President Atambayev told the BBC that if no agreement could be reached, nationalisation would be considered to calm down public agitation over the issue.

"Even if it is very hard and harmful for Kyrgyzstan, maybe, for the sake of pacifying people, we might take a harmful action... Like nationalisation," he said.

Continuous protests

Protests over Kumtor first began a year ago when Kyrgyz opposition supporters tried to storm government buildings. Three prominent MPs were subsequently charged with attempting to seize power.

Kyrgyz protesters clash with police on the road leading to the Kumtor gold mine
Protesters blocked the road to the Kumtor mine in May

In May there were angry clashes between hundreds of police and demonstrators who blocked the road to the Kumtor site and cut its power supply.

Sporadic protests have continued ever since. The authorities have accused protest organisers and opposition politicians of fuelling the demonstrations to damage the government.

But observers say such a move would be an action of last resort with unpredictable consequences for the president.

Up to now Mr Atambayev has staunchly defended the shared ownership deal.

Centerra says it is ready to continue a constructive dialogue, but that any agreement must be fair to all of its shareholders.

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