Gold’s 27% advance stands out in mixed year for metals markets
Gold is heading for one of its biggest annual gains this century.
Canada’s Centerra Gold (TSX: CG) is closer to settling a dispute triggered by Kyrgyzstan’s expropriation of the company’s giant Kumtor gold mine in 2021, after the country’s ministers backed on Monday the government’s decision to solve the issue.
Negotiations on the exact terms of the new agreement are still ongoing, the Toronto-based miner said on Monday, adding that there was no guarantee of any proposed deal being completed.
The gold miner and the Kyrgyz government have clashed over financial and environmental issues related to the mine for years. Their standoff took a turn for the worse in May 2021, when the nation took control of the mine, alleging that the company was running it in a way that was detrimental to both the environment and nearby communities.
Centerra, which has denied all the allegations, kicked off arbitration shortly after and sued former director Tengiz Bolturuk, claiming that the dual Canadian and Kyrgyz citizen had secretly co-operated to stage the expropriation.
The company had laid out a framework earlier this year for resolving the dispute outside of court. In it, Centerra proposed to receive about 26.1% of its common stock held by local gold refiner Kyrgyzaltyn JSC. It also said the state should assume all responsibility for the company’s two Kyrgyz subsidiaries as well as the giant mine.
Kumtor, which accounts for a fifth of the ex-Soviet country’s total industrial output, was the largest of Centerra’s gold mines, contributing to more than 50% of the company’s total output.
The operation is also crucial to Kyrgyzstan, as it is the country’s largest private-sector employer, taxpayer, and main foreign investment. Between 1997 and 2020, it produced more than 13.2 million ounces of gold, with last year’s output slightly over 556,000 ounces.
