ESG

Kaz comes a cropper in Kyrgyzstan

Just when investors thought it might be safe to enter the Kyrgyz Republic, the volatile government has struck again, this time suspending operations at Kaz Minerals’ (LN:KAZ) Bozymchak copper and gold mine.

Staff reporter
Bozymchak produced 7,000 tonnes of copper cathode and 38,000oz of gold in 2016

Bozymchak produced 7,000 tonnes of copper cathode and 38,000oz of gold in 2016

In a two-paragraph statement, the London-listed company said the government had enforced the stoppage at the openpit mine for a period of three months.

The mine produced 7,000 tonnes of copper cathode and 38,000oz of gold in 2016, so is by no means a big part of the company's 250,000t-plus copper portfolio, but the move sends a negative message to an investment community wary of putting any money into the country.

Kaz said it did not know why the mine was suspended and believed Bozymchak to be in compliance with its obligations.

Reuters has linked the move to the recent presidential election in the Kyrgyz Republic.

During the country's presidential election process, Kazakh president Nursultan Nazarbayev met a Kyrgyz opposition candidate.

This, according to the newswire, led to some political leaders in the republic accusing the Central Asian powerhouse of interfering in the elections.

Kaz, meanwhile, said it was looking to strike up discussions with the government as soon as possible to rectify the situation. It said it's group production guidance of 250,000-270,000t for 2017 remained unchanged.

A day after Kaz announced the suspension, it issued another statement saying Bozymchak had resumed full production and the government-enforced suspension had been cancelled.

It was only two months ago that investor sentiment towards the Kyrgyz Republic looked to be on the up after a long-standing fight between the country's biggest miner, Centerra Gold (CN:CG), and the government was brought to a halt following a US$60 million deal.

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