The settlement of controversial issues positively affects the investment climate of the country, he added.
“Firstly, Centerra withdrew its $100 million arbitration lawsuit which, most likely, would have placed a heavy burden on taxpayers. Secondly, this will positively affect the investment climate of the country, because the more arbitration proceedings, the more investor’s confidence in the country is. We hope that the Government will continue to resolve all disputed issues through negotiations, without bringing the matter to court. The third important point is the resumption of exploration at the mine, which was not carried out from 2012 to 2018. This indicates the interest of Centerra in working in Kyrgyzstan and the long-term nature of the largest investment project. And it is very important for us that as many large public companies as possible remain in the country's market,” Sydykov said.
The Strategic Agreement between the Government of the Kyrgyz Republic and Centerra Gold Inc. allowed to resolve many risks and increase investment attractiveness. This was announced at a press conference in the Government to clarify the details of the Strategic Agreement on the Kumtor project, the press service of the Government of the Kyrgyz Republic reports.
Emil Osmonbetov, Chairman of the State Committee for Industry, Energy and Subsoil Use, spoke about the main advantages of the document. The Government has achieved an increase in financial income under the Strategic Agreement with Centerra Gold Inc. to 10 billion 471 million soms.
Board Chairman of Kyrgyzaltyn OJSC Almaz Alimbekov recalled that at one time the relevant departments filed a lawsuit in the courts of Kyrgyzstan for the recovery of funds, and Centerra Gold Inc. in turn filed a lawsuit with international arbitration. Negotiations started with the Canadian side, which as a result allowed resolving of this issue, both in international arbitration and in Kyrgyz courts.
Under the Strategic Agreement, thanks to additional negotiations, the Government ensured that pollution charges increased from $2.7 million to $3.7 million, that is, about 260 million soms will be received annually. The Regional Development Partnership Social Fund and the Nature Development Fund were created. Alimbekov also noted that Kyrgyzstan’s stake has increased from $335 million to $740 million. An agreement was reached on geological exploration, for which $24 million was allocated, and due to the study of these issues, work at the mine can last another 5-6 years, until 2031-2032.
Economy Minister Sanjar Mukanbetov spoke about the activities of two funds created under the Strategic Agreement. The Nature Development Fund received $50 million and $3.7 million will be received annually, given that the agreement concerned 2017-2018/ In addition to $50 million another $7.4 million received, that is, today the Fund has $ 57.4 million. The Fund is managed by a supervisory board.
The Regional Development Partnership Social Fund has already received $5 million and 0.4% of gross revenue will come from Kumtor annually. This Fund will be also managed by the supervisory board.
Photo by the press service of the Government of the Kyrgyz Republic.