We’ve heard of many a gold heist. But this one may top them all because rather than a cache of gold bullion, the heist in this case involves an entire gold mine.
The mine is one of the largest in Asia, the Kumtor Mine in Kyrgyzstan, and it’s the government of the former Soviet republic that is accused of robbery.
Centerra Gold, a publicly-traded Toronto-based mining company, has been operating the Kumtor Mine for years. It describes Kumtor as the largest foreign-owned gold mine in the former Soviet Union. But in May the parliament of the Kyrgyz Republic (Krygyzstan’s official name) approved a resolution to install “external management” at the mine, after which government officials effectively seized control of Kumtor, nationalizing Centerra’s most important property.
Kyrgyz authorities claim Centerra violated environmental regulations. But the company says it had never previously been asked to change its practices and the allegations are simply a pretext for illegally seizing the mine.
“The unjustified actions of the Government leave Centerra no choice but to continue to protect its interests and those of its shareholders and Kumtor Gold Company (Centerra’s Kyrgyz subsidiary) through all legal means, including binding international arbitration,” Centerra said in a statement.
The division of profits between Centerra and the Kyrgyz Republic has been a subject of dispute between the two parties, involving substantial sums since Kumtor has produced well over 12 million ounces of gold since 1997.
Centerra has begun bankruptcy proceedings for its Kyryrgz assets, a move designed to impose a worldwide stay on all claims against its Kumtor Gold Company and, the company hopes, lead to negotiations with the Krygyz government.