Kyrgyzstan: PM resigns over Kumtor-Centerra impasse

Kyrgyz Prime Minister Joomart Otorbaev announced he is stepping down after just over a year in office, making this the fifth prime minister the country has seen since the 2010 revolution. Otorbaev didn’t give an immediate reason for his resignation but the move comes in the midst of an enormous debate over the operations of the Kumtor gold mine. The issue at stake are negotiations regarding ownership of the gold mine between the Krygyz government and Canadian mining conglomerate Centerra. The first deal, signed in 2003 gave the government just a 17% stake in the operations and profit, with Centerra controlling the rest, but subsequent renegotiations in 2009 gave the government a larger 33% share.

Opposition parties, locals, and unions have called for the nationalization of the mine, inducing Parliament to call for the talks which are pushing for 50-50 ownership. The last obstacle was Otorbaev himself, who has made it one of his priorities to reach a deal with Centerra. Talks completely broke down when news leaked that Otorbaev was negotiating for increased representation on Centerra’s Board of Directors rather than lobbying for total nationalization, probably sparking the breakdown in local support that has led to the resignation.

However, suspicious behavior exists on both sides. Centerra Gold, probably in reaction to the increased calls for nationalization, have sharply revised their estimations of total proven and probable reserves in Kumtor from 8.5 million ounces to 6.1 million ounces at the end of 2014.

Follow us on Twitter: @SteppeDispatch

News Briefs:

  • Kazakhstan has rejected a single currency union proposal from Moscow, dealing a major blow to Russian plans for the Eurasian Economic Union. Deputy Economy Minister TImur Zhaqsylyqov was firm in his refusal, and it is surprising that a comparatively low level figure would voice this objection when the issue was first raised by Vladimir Putin in a meeting between heads of state of Armenia, Belarus, Kazakhstan, and Russia. Tensions are on the rise on other issues as well, particularly Kazakh safety concerns about Russian food products and a retaliatory Russian ban.
  • Ukrainian President Petro Poroshenko has suggested that a popular vote on whether to join NATO appears to be in order. Of course, this comment was made to a French television station during an interview, and no details about the referendum. However, the statement matches a pledge on his part to obtain approval via referendum before any decision was made. Poroshenko then backtracked, saying the top priority is for the country to join the European Union.
  • Hundreds of coal miners are striking in Kiev, demanding that domestic fuel consumption remain a top priority for the government to avoid the closure of mines. The government maintains that it was forced to buy winter coal supplies from abroad due to the conflict in eastern Ukraine, where most of the country’s largest coal mines are located. Despite this, Coal and Energy Minister Volodymyr Demchyshyn hurried back to the country to confront the crisis.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s