Centerra says Kyrgyzstan claim for $152M environmental compensation unfounded

BISHKEK, Kyrgyzstan – A Canadian-based gold mining company operating in Kyrgyzstan has decried as “exaggerated” and “without foundation” a $152-million environmental damages claim from the Central Asian country.

Toronto-headquartered Centerra Gold (TSX:CG) said in a statement Friday that independent experts have previously determined that its Kumtor mine project had “no materially significant” environmental issues.

Kumtor, which accounts for about 12 per cent of the Kyrgyz economy, has been at the centre of heated political debate among those seeking its nationalization and officials who believe that would deter much-needed foreign investment.

Centerra president and CEO Ian Atkinson said in a statement that the company believes the Kumtor project “meets or exceeds” Kyrgyz and international environmental, safety and health standards.

“The activities raised in the claims, particularly the mining and placement of waste rock on waste dumps, have been approved at all times by appropriate Kyrgyz authorities and are specifically referred to in Kumtor’s annual mine plans, which are submitted and approved annually by Kyrgyz authorities,” Atkinson said in a statement.

Centerra notes that as part of restated project agreements signed by the government and the company in 2009, authorities “fully released Kumtor in respect of all prior claims, including all environmental matters known by or reported to any Kyrgyz authority.”

The agreements also provided a complete listing of all taxes and payments to be made to the Kyrgyz republic, including a fixed environmental charge.

“Accordingly, no other tax, duties, or other obligations are to be paid to the Kyrgyz republic, however they may be characterized,” it said.

Meanwhile, Centerra said it has received and was reviewing a directive from the State Inspectorate Office for Environmental and Technical Safety, or SEITS, requiring actions to correct various “alleged environmental and technical violations.”

The company said members of its management would be meeting with senior Kyrgyz government officials to discuss the claims and directive from SEITS and the status of the State Commission’s review of the Kumtor Project.

Kyrgyzstan, a country of five million people on China’s mountainous western border, has come to prominence in recent years because it hosts a U.S. air base used to support military operations in nearby Afghanistan.

— With files from The Canadian Press