President Sadyr Zhaparov: The Kumtor field has been completely and irrevocably returned to Kyrgyzstan
On April 4, President of the Kyrgyz Republic Sadyr Zhaparov addressed the people of the country.
Here is the full text of the address of the Head of State:
"Good evening, dear Kyrgyzstanis! My glorious people! Holy Motherland!
The reason for my live address today is that we can announce to the Kyrgyz people and the entire world community that the Kumtor field has been completely and irrevocably returned to our Homeland.
A dispute settlement agreement has just been signed with Centerra.
Thus, we were able to ensure the complete and irrevocable transfer to Kyrgyzstan of our largest national asset – the Kumtor mine.
This means that Kumtor fully belongs to Kyrgyzstan!
Without any exaggeration, I can say that today will go down in the history of our country as a turning point.
Our people have taken responsibility for their fate into their own hands.
This is how it is necessary to defend national interests, this proves that we have embarked on the path of confident growth and development.
I heartily congratulate all of us on this achievement.
I want to tell you about the main points of the agreements reached.
The Kumtor field now belongs entirely to Kyrgyzstan. 100% of the shares in the Kumtor Gold Company belong to our republic.
We have also ensured that our full control over the field has been counted since the introduction of external management in May last year. Therefore, all profits from May 15, 2021 also belong to us - this is more than 323 million US dollars.
In addition, Centerra pays us dividends for three quarters of last year. In net volume, they amount to about 11 million US dollars.
Another achievement is that we have reached an agreement on a one–time payment by Centerra to the Kyrgyz side of 50 million US dollars.
We are returning control over the Reclamation Fund for the Kumtor mine - we receive about $ 53 million, which was previously stored in a trust account in one of the banks in London.
Centerra refuses to pay $29 million for a shipment of gold delivered in May 2021.
Centerra stops all lawsuits initiated against the Kyrgyz side: in the USA, Sweden and Canada.
For its part, Kyrgyzaltyn OJSC transfers its 26% stake to Centerra. At the same time, Centerra covers all tax payments under Canadian law related to the transfer of rights to the specified block of shares.
The Kyrgyz side also terminates all judicial and other cases and claims initiated against Centerra.
Reaching such an agreement was not easy, and it took about a year to make decisions on each item.
I want to assure you that the terms of the concluded agreement are the most optimal and beneficial for the state interests of the country, taking into account the current global crisis and the state of Kyrgyzstan.
As you know, lawsuits and international arbitration can drag on for a very long time. In an attempt to get even more favorable conditions, we could spend at least five or even seven or eight years and tens of millions of funds.
At the same time, a positive decision in our favor was not guaranteed at all. We could have lost even more money and invaluable time.
From the very beginning of this dispute, we have argued that we are not talking about nationalization. We have never pitted a country against foreign companies and investors.
It was about specific management issues of the Kumtor mine.
We have always said that Kyrgyzstan is open for business. We will always welcome investments from those who share our respect for the rule of law, our national wealth and our national interests. Today we proved it once again.
Negotiations on the terms of the agreement were very difficult. Despite everything, from the very beginning we stood firmly on the protection of our state interests, resolutely defended our positions.
At first there were attempts to present us to the international community as "savages, invaders". Then we were presented with completely unacceptable demands. We all stood it, and we stood it.
The most important thing for us was the interests of the Kyrgyz people. And in the end, we achieved drastic changes in the initial negotiating positions.
I assure you once again: we are absolutely sure that we have achieved the most profitable results for our country today.
Our decision is also based on the qualified assessment of a team of lawyers representing the best specialists in international arbitration.
Evaluate for yourself what I mean by acquired benefits.
If we used to receive purely symbolic amounts of dividends every year, then in the first seven months of last year we received an income of $ 323 million. This year, God willing, we will get 500 million dollars.
According to the most conservative estimates, the Kumtor field is now estimated at three billion dollars.
According to experts, in the next 10 years we will receive 5 billion US dollars in profit from Kumtor, having extracted 160-200 tons of gold. This is a direct benefit and a great support for the budget.
These are only confirmed and guaranteed stocks. But there are many other possibilities out there. I don't want to get ahead of myself and dwell on this in detail now. I just want to assure you that there is a lot of potential there, and Kumtor will still serve our people.
You know that in the coming years we will have a peak in the repayment of previous debts. Today it is necessary to emphasize that due to the fact that we have gained control over Kumtor, we can confidently say that we will cope with this task.
In addition, there is another factor that served as a great reason for the decision not to delay the conclusion of a settlement agreement on Kumtor on the terms we announced. This is the economic situation in the world - in the form of rising prices for almost the entire list of food we buy from outside: from wheat, sugar, vegetable oil to the petroleum products and fertilizers.
Now is not the time to take risks.
We need the resources that we have, and we must eliminate all and any obstacles to the receipt of external investments.
As the Head of State, I will not shy away from taking decisive and urgent measures. I will not allow myself to delay after taking responsibility for all the residents of Kyrgyzstan.
Full 100% control over Kumtor has finally passed into our hands.
What should have happened twenty years ago has been achieved only today. This, of course, is bitter and insulting!
I do not want to talk today about the irretrievably lost, in fact stolen, God-given to our people, wealth.
I have talked about the wealth of Kumtor throughout my career in Kyrgyz politics. Together with my colleagues and my family, I paid a high price.
Now is not the time to aimlessly count and look for the guilty and find out who was right or wrong.
I want to lead our people forward.
Don't look back. We must take bold and big steps forward. As befits a sovereign people on their own land. We are the masters of our destiny. It's time to take responsibility for your future. The decision on Kumtor is only the beginning of a policy of great achievements on the path of development of our state.
Taking this opportunity, I would like to separately thank my entire team, a group of negotiators, our domestic and international lawyers for the successful completion of these negotiations. You have done a great thing for the country!
The entire Kumtor labor collective, which did not interrupt the gold mining process for a minute, also deserved our warm words and the highest appreciation.
I want to thank the deputies of the Jogorku Kenesh for their support and approval of the solutions we have proposed.
And of course, I sincerely thank all our Kyrgyzstanis, all those people who have been nobly and bravely fighting for the return of Kumtor to our people all these years!
Today is our common victory!
I would like to congratulate all of you on the beginning of the bright month of Ramadan!
I wish grace and happiness to come to every home.
May the Almighty accept your fasts and prayers uttered in this blessed month!
May the Creator bless our Kyrgyzstan!"