BISHKEK, Oct 20 (Reuters) - Kyrgyzstan’s President Almazbek Atambayev said on Monday he could seek to delist Centerra Gold in Toronto after a Canadian court effectively suspended its Kyrgyz-held shares.
The former Soviet republic owns a third of Centerra which is developing the vast Kumtor gold field near China’s border. The government and the company are engaged in uneasy talks on restructuring of the project, which Kyrgyzstan hopes will boost its budget revenues.
On Oct. 14, Canadian miner Stans Energy obtained an order from an Ontario court which prohibits the Kyrgyz Republic and its state gold company Kyrgyzaltyn from making any move to sell, pledge or exchange 47 million shares in Centerra.
Stans Energy has sought payment from the government of $118 million in damages and losses after losing its licence for the Kutessay II rare-earth mine in Kyrgyzstan.
Kyrgyz leader Atambayev said that legal actions taken by Canadian courts against Kyrgyzstan were discriminatory.
“In particular, a question could be raised about possible delisting of Centerra Gold shares on the Toronto Stock Exchange,” he said in a written statement published by his press service.
“Or we could take more decisive steps to protect Kyrgyzstan’s national interests which would exclude deciding Kumtor’s fate in the courts of Canada, whose companies have already withdrawn by different means the bigger part of profits from one of the world’s largest gold deposits.”
He did not elaborate. Centerra Gold could not immediately be reached for comment.
Centerra, which employs more than 3,000 workers in Kyrgyzstan, accounted for 7.7 percent of Kyrgyzstan’s gross domestic product and 24 percent of industrial output in 2013, while its gold made up 36.5 percent of all Kyrgyz exports, official data show.
Under a non-binding draft agreement with Centerra, Kyrgyzstan would swap its 32.7 percent Centerra stake for half of a joint venture controlling the Kumtor mine, the company’s main asset. But this deal has not been finalised.
Earlier this year international arbitration upheld a claim filed by Stans Energy against Kyrgyzstan. Stans Energy said the government had effectively expropriated its 20-year Kutessay II licence which it acquired in December 2009.
A court in the Kyrgyz capital Bishkek cancelled the licence last year after local prosecutors filed a suit against Stans Energy, claiming it had violated a number of licence terms.
For over 30 years, Kutessay II produced 80 percent of the rare earth metals for the former Soviet Union. (Writing by Dmitry Solovyov; Editing by Ruth Pitchford)