Kyrgyz lawmakers want more say in Centerra, not nationalisation

Fri Apr 17, 2015 9:16am EDT
 
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BISHKEK, April 17 (Reuters) - The ruling coalition in Kyrgyzstan's parliament said on Friday the Central Asian nation should seek to raise its representation on Centerra Gold's board, rejecting calls to nationalise the flagship venture with the Canadian investor.

"We do not support nationalisation. Our decision is to remain in Centerra and change its management. We do not trust the current management," Felix Kulov, the leader of the three-party majority in the Kyrgyz legislature, told journalists after the coalition's meeting.

"We support the government, we will not nationalise the venture," said coalition member Omurbek Tekebayev.

Kyrgyzstan and the Toronto-listed miner have been in talks since 2013 on a deal that would involve the ex-Soviet nation swapping its 32.7 percent stake in Centerra for half of a joint venture that would control the Kumtor mine.

But Kyrgyz Prime Minister Joomart Otorbayev said last week that forming such a venture was no longer in Kyrgyzstan's interest following a drop in the mine's reserves, recently published by Centerra Gold.

He said Kyrgyzstan wanted to increase the number of its members on Centerra's board of directors. Kyrgyzstan currently has three representatives on the 11-member board, he said.

The coalition plans to put to vote in parliament next week a draft resolution rejecting Kumtor's nationalisation, backed by the country's opposition, and propose to promote Kyrgyzstan's interests in Centerra Gold by "introducing world-class managers" in its board. No further details of the draft were available.

Kumtor, located in a permafrost area in the Tien Shan mountains near the Chinese border, is Kyrgyzstan's largest gold field and Centerra Gold's core asset.

In February Centerra published its 2014 year-end reserve and resource update, which put Kumtor's proven and probable reserves at an estimated 6.1 million ounces of contained gold, compared to 8.5 million as of end-2013. (Reporting by Olga Dzyubenko; Writing by Dmitry Solovyov, editing by David Evans)