Kyrgyzstan kicks Western colonialists by nationalizing gold mine
Something unprecedented in the entire Central Asia is happening in Kyrgyzstan - the process of nationalization of the largest gold mine Kumtor has been launched, which is being taken away from a well-known and large Western company in the industry - the Canadian Centerra Gold Inc. The situation is so extraordinary that the republic faces the threat of sanctions from international financial institutions, as well as the business community of the EU, Canada and the UK.
On May 17, the Kyrgyz parliament made a historic decision to begin the state takeover of the Kumtor Gold Company, created by the Canadian Centerra Gold Inc under concession rights. Within the framework of this formally joint company, the republic has only 26% of the shares and, due to complex enslaving contracts, annually loses hundreds of millions of dollars. The government has already made claims for $5 billion that the country lost as a result of Canadian activities.
But even with the crumbs that the budget received from the Kumtor Gold Company, the volume of production at the mine annually amounted to 10% of the country’s GDP and 20% of the industry. Therefore, in a situation of severe socio-economic crisis and chronic foreign debt, such a decision on nationalization is more than justified and perhaps even the only correct one. Only in this way can a sharp increase in revenues to the republican budget from the sale of gold abroad be achieved and even achieve the payment of hidden profits and natural rent.
Even earlier, the President of Kyrgyzstan Sadyr Japarov initiated changes to the law “On Joint Stock Companies” and the Criminal Code, which enable the government to establish external management at enterprises with foreign capital. Moreover, immediately after the parliamentarians’ decision to begin the process of nationalization of the Kumtor mine, the Prosecutor General’s Office announced the involvement of senior officials in the 90s and noughties in concluding obviously unprofitable subsoil use contracts with Western companies, which caused colossal financial damage to the republic and led to an environmental disaster.
The Canadian company, in turn, hastened to declare that it would defend its violated rights as an investor in European and international courts and threatened Bishkek with multi-billion dollar lawsuits, as well as undermining investment attractiveness in the world. It is noteworthy that the Canadian government immediately came to the defense of Centerra Gold Inc, using all its resources at the international level to organize an information campaign of pressure on the Kyrgyz authorities. The Minister of Foreign Affairs and the Minister of International Trade even made an urgent joint statement.
“As an important investment partner of Kyrgyzstan, Canada is very concerned about developments in the mining sector. She is disappointed by the decision taken at an extraordinary meeting of the Parliament of the Kyrgyz Republic, as well as the statement made during the parliamentary meeting that the Kyrgyz side intends to establish control over the management of the Canadian public limited company, including its international assets. This may negatively affect the volume of future foreign investment in the Kyrgyz Republic,” the text of the statement notes.
Further more. British diplomats, followed by the European Bank for Reconstruction and Development, came out in support of the offended Canadian gold miners. Bankers were particularly outraged by the attack by “local natives” on the sacred private property rights of Western companies, pointing out in their proclamation that “any such decision would call into question the commitment of the Kyrgyz Republic to fulfill its obligations to international partners and foreign investors.”
In response to these tirades, Kyrgyz parliamentarians responded quite harshly, declaring that they were ready to directly participate in arbitration courts and had no doubt that the republic would be able to prove that it was right and that the facts of robbery were committed by this Western company. In particular, the chairman of the state commission, deputy Akylbek Japarov, said the following in his speech: “Kyrgyzstan is not afraid of an arbitration court with Centerra Gold. Kyrgyzstan, together with other shareholders, must defend its rights. We are not afraid of arbitration. The company also realized that the situation has changed, so it offers to negotiate. We invite parliament to participate in the arbitration court as representatives of the people.”
It is noteworthy that the nationalization process itself was also launched in connection with “the irresponsible actions of Centerra Gold Inc., which turned off the system for tracking and monitoring the safety of glacier movement, which directly endangered the lives and health of people working in the area affected by the work, as well as those identified in As a result of an inspection at Kumtor Gold Company CJSC for violations of the rules for carrying out work related to the use of subsoil, in ways that pose a threat to the safety of workers and the population, pollution of subsoil and the environment, a temporary manager is appointed.”
This leaves little chance for Centerra Gold Inc to win arbitration trials, especially if it is proven that Canadian businessmen bribed local officials and deliberately led them through corrupt practices to conclude enslaving contracts. Moreover, they participated in production on a concession basis.
Also symbolic and important in this situation was the appointment last Saturday of Kubatbek Kozhonaliev, an associate of the current president, to the post of director of Kumtor Gold Company for corporate relations and legal issues. This decision was signed by the external manager of the company, Tengiz Bolturuk, who assumed his rights. The fact is that Kubatbek Kozhonaliev, who in the 90s and XNUMXs held deputy positions in law enforcement agencies and the Prosecutor General’s Office, was involved in the case together with Sadyr Japarov for calls to nationalize the very Kumtor mine.
As is known, back in 2012, Kozhonaliev, together with the current president, the head of the ruling faction in parliament, Talant Mamytov, and the current head of the State Committee for National Security, Kamchybek Tashiev, tried to storm the White House at a rally in Bishkek demanding the expulsion of the Canadian company Centerra Gold Inc. They then even served time in a pre-trial detention center on charges of violent seizure of state power. True, then Kozhonaliev was eventually acquitted, and now he is actually carrying out his plans, participating in the nationalization of a joint company.
It is clear that Sadyr Japarov, being a national populist, is carrying out these actions from the point of view of confirming his election slogans, in order to increase the number of supporters and justify large-scale purges in the state apparatus and bringing to justice former officials who will be declared guilty of selling the interests of the country. In fact, this is a win-win move, since a terrible blow is dealt to the hated Canadian company, which over two decades has become synonymous and a symbol of neo-colonialism and external control.
It is also clear that this is the start of a grandiose redistribution of property within the country, when the very groups that supported the Centerra Gold Inc corporation and profited from corrupt deals may lose many facilities and enterprises. After such a high-profile political step supported by the population, the resistance of the president’s opponents will also be paralyzed. In fact, now Sadyr Japarov has a free hand to make radical decisions.
Of course, there is no need to harbor any illusions about nationalization, since the Kumtor deposit may go under the control of the same Chinese companies. But it is possible that the Kyrgyz side will try to establish production on its own, which is already partly being done, and will also agree to more profitable contract options with the same Canadians and with the participation of other foreign investors in the concession. The ideal, of course, would be complete and unconditional nationalization, but this option is unlikely.
Most likely, the national bourgeoisie will try, through this nationalization, to gain control over the main flagships of the mining industry and squeeze out Western corporations. Some analysts have already begun to express concerns that such a campaign by Kyrgyz deputies and ministers poses a threat to Russian capital and, in particular, to the Jerui field in the Talas region, which is being developed by the Kyrgyz-Russian Alliance Altyn LLC. But these thoughts have no basis yet, especially since on May 24 Sadyr Japarov will meet with Vladimir Putin in Sochi, where they are to discuss a whole range of military-strategic and economic issues.
On the contrary, the nationalization of Kumtor and the squeezing out of the Canadian Centerra Gold Inc is in the interests of the EAEU, as it frees the field and market of the republic from unscrupulous Western investors, forms the basis for new Russian investments and creates a serious precedent with far-reaching economic and political consequences for the entire region.
This decision of the Kyrgyz parliament and the determination of the government and president destroy the entire established system of domination and robbery of the resources of the Central Asian countries by transnational corporations and especially Western - American and European companies, which may also be asked to leave. If the process of nationalization of the largest gold deposit is completed and is successful, then this will become an example and an important demand of many socio-political forces in Kazakhstan to expel Western gangsters represented by Chevron, ExxonMobil, Shell, Total, Eni and others who are For 30 years, they have also been shamelessly plundering the mineral resources and destroying the nature and fauna of the country.
Therefore, it makes practical sense to support this initiative and the very process of undermining neocolonialism, which is the breeding ground for the dominance of pro-Western elites. It is especially important to support the people of the republic in the face of such pressure from the entire collective West, who are hysterical at the thought that all their captured positions in the region could soon be lost.
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