(ATF) Canada warned Kyrgyzstan on Monday that it was “very concerned” over the nationalisation of Centerra’s Kumtor Gold Company, saying it threatened further foreign investment in the Central Asian country.
Canadian-owned Centerra said it had initiated binding arbitration against the Kyrgyzstan government, after the parliament passed a law allowing the state to temporarily take over Kumtor, the country’s biggest industrial enterprise.
Recently, a Kyrgyzstan court imposed a $3.1 billion fine on a Centerra unit, Kumtor Gold Company, which operates the gold mine, after ruling that the firm had violated environmental laws.
“As a significant investment partner of the Kyrgyz Republic, Canada is very concerned about continued developments in the mining sector,” Canadian Foreign Affairs Minister Marc Garneau and International Trade Minister Mary Ng said in a joint statement on Monday.
“Canada is also disappointed that this dispute between foreign investors and the government of the Kyrgyz Republic was not allowed to be resolved transparently by the parties working together.”
Earlier on Monday, Centerra said it would suspend its previously issued 2021 production guidance and three-year outlook for the asset “in view of the fact that Centerra is no longer in control” of the mine.
PROJECT CANCELLED
This is not the first time Kyrgyzstan has upset foreign investors this year. In February, the government cancelled a $275 million Chinese investment project in the eastern part of the country following mass protests against it.
The government’s press service said the decision to halt the plans to build a major logistics centre was made due to protests “by some local residents of the At-Bashi district” in the Naryn region.
The agreement had been signed during Chinese President Xi Jinping’s visit to Kyrgyzstan in June 2019.
Kyrgyz authorities said they would reverse a decision to provide 200 hectares of land for the project.
The contract was annulled because “it is not possible to work on a large, long-term project amid circumstances” where part of the local population opposes the construction of the logistics centre, authorities said in a statement.
Local residents held several protests against the project beginning in January.
With reporting by Reuters
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