Kyrgyz deputies call for criminal proceedings for Kumtor development violations
BISHKEK. June 20 (Interfax) - A Kyrgyz parliamentary commission investigating the Kumtor Operating Company (KOC, the operator of the Kumtor gold-ore deposit) has called for criminal proceedings to be initiated against former government officials and former and current management at KOC.
Sadyr Zhaparov, the head of the commission and a deputy for the opposition faction Ata Zhurt, said Thursday in parliament that financial and economic violations had taken place at the Kumtor mine as well as violation of environmental regulations.
Citing information from the commission, Zhaparov said that "250 tonnes of gold was produced in the 15 years that the mine has been developed, but net profit going to the Kyrgyz budget has only reached $44 million." He also spoke about alleged "bribes paid by the company to Kyrgyz officials of $17 million."
Development of the Kumtor mine, he says, "presents a threat associated with environmental violations with waste from mine development going into the river or stacking up on glaciers. This could lead to an environmental catastrophe that environmentalists estimate would lead to losses of $200 billion," Zhaparov said.
He said experts from the Kyrgyz Academy of Sciences did not provide objective information about the environmental situation at the Kumtor mine.
Zhaparov proposes that the Prosecutor General's Office open a criminal case against former government officials, who were in office when the agreement on developing the deposit was signed, and against some former and current managers at KOC "for corruption, gray schemes and spending."
Kumtor Operating Company Vice President Andrei Sazanov told Interfax that "the conclusions of the commission contained incorrect points."
He promised the company would make a special announcement on the commission's report and pointed out that "the company has only just started reading the 300-page report." Asked about the observance of environmental regulations at Kumtor, Sazanov said "there are environmental questions, but there are also approaches for their resolution."
"KOC has operated strictly within the framework of the agreement signed with the government of Kyrgyzstan from the start," he said.
"The company is currently working in accordance with the agreement signed in 2009 and KOC is meeting all the conditions written in it, including with regard payments to the budget and other conditions," he said.
Sazonov said he does "not see the need to file a lawsuit against the parliamentary commission chief for the report."
Kumtor gold mine is located in the Issyk-Kul region in north Kygyzstan at over 4,000 m above sea level.
Kumtor Operating Company is an operator in Kyrgyzstan for gold production company Centerra Gold Inc. (Canada). The operator sells Dore bars produces at the mine to Kyrgyz company Kyrgyzaltyn for refining and subsequent sale, as envisaged in an agreement between KOC, OJSC Kyrgyzaltyn and the Kyrgyz government.
Centerra Gold is a leading North American gold producer and the largest western company producing gold in Central Asia. Kyrgyzaltyn owns 32.8% of Centerra Gold.