Tag Archives: Kyrgyzstan

Kyrgyzstan-focused Centerra Gold scraps quarterly dividend for first time since 2010

BISHKEK, DEC. 9 2016 (The Conway Bulletin) — Canadian gold miner Centerra Gold said it suspended its regular quarterly dividend issue because the bank accounts of its subsidiary in Kyrgyzstan that operates the Kumtor mine has been frozen.

Scrapping the quarterly $0.04 dividend payout to shareholders breaks with a six-year tradition and highlights tension between the Kyrgyz government and the Toronto- listed mining company. The Kyrgyz government, owns a 27% stake in the company but wants, instead, to own a direct stake in Kumtor.

“In light of the current restrictions relating to funds held at Centerra’s wholly-owned Kyrgyz Republic subsidiary, Kumtor Gold Company, Centerra’s Board at its regularly scheduled board meeting yesterday decided against declaring a third quarter dividend,” the company said in a statement.

“In addition, the Board has decided to suspend future dividends for the time being.”

Kumtor’s bank accounts have been frozen since June because of an unpaid environmental fine. Centerra has said the fine is politically motivated to force it to relinquish more equity in the gold mine. For the past couple of years, Kyrgyzstan has argued that it wants to give up its share in Centerra in exchange for a direct 50% stake in Kumtor.

Kumtor is Centerra’s biggest asset. In 2015 it accounted for 97% of its total revenues. And the gold mine is also vital for the Kyrgyz economy. It is its single biggest industrial asset, making up an estimated 10% of total GDP.

Reuters quoted RBC Capital Markets analyst Stephen Walker who said that for every quarter Centerra fails to pay a dividend, Kyrgyz state- owned Kyrgyzaltyn will lose around $9.5m in revenue – a vital source of funding.

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(News report from Issue No. 309, published on Dec. 16 2016)

Kyrgyzstan signs loan deal with ABD

DEC. 15 2016 (The Conway Bulletin) — The Asian Development Bank and the Kyrgyz government signed a loan agreement for the upgrade of the Soviet-era Toktogul hydropower plant, the biggest in Kyrgyzstan. The ADB will provide loans totalling $60m and a $50m grant. Toktogul produces around 40% of the country’s electricity. This is the third phase of the refurbishment at Toktogul. The ABD has already participated in the funding of the first two phases.

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(News report from Issue No. 309, published on Dec. 16 2016)

Kyrgyzstan passes referendum that extends powers of PM and bans same-sex marriage

BISHKEK, DEC. 11 2016 (The Conway Bulletin) — Kyrgyz voted overwhelmingly in a referendum to change the country’s constitution and shift power from the president’s office to the PM.

The referendum was controversial because opposition groups said that it was designed to empower current president Almazbek Atambayev who has to stand down next year. They accused him of eyeing up a strengthened PM’s office as his next role.

Under the changes the PM will be able to sack cabinet ministers and heads of local administrative regions and the president will no longer chair the Kyrgyz defence council. The referendum also banned same-sex marriage, angering gay rights groups.

Around 80% of the vote was cast in favour of the referendum proposals. Vote turnout was around 42% and one senior Western diplomat told The Conway Bulletin that the referendum only gained enough momentum because officials had cajoled people living in new villages that have sprung up on the outskirts of Bishkek, the capital, into voting for the proposals.

Even so, there was plenty of grumbling too about foul play and vote stuffing.

Nazira, 24, an independent observer said: “Some political parties’ representatives were standing at the polling station entrance, talking to voters and offering them up to 3,000 som ($30) for their vote.”

This is the third referendum in Central Asia this year.

Tajiks voted to extend the length of presidential terms and in Turkmenistan they scrapped a limit on the number of terms a president can remain in power. Across the Caspian Sea, in Azerbaijan a referendum was used to lengthen a presidential term.

In an election run alongside the referendum, people in Bishkek voted to retain the Social Democrats as their city government, although with a reduced number of seats.

The Social Democrats, the party of President Atambayev, won 13 seats in the Bishkek city election, just ahead of Ata Jurt with 12 seats. The other 20 seats were split between Onuguu-Progress, Mekenim Kyrgyzstan and Kyrgyzstan parties.

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(News report from Issue No. 309, published on Dec. 16 2016)

Power production rises in Kyrgyzstan

DEC. 14 2016 (The Conway Bulletin) — Electricity production in Kyrgyzstan was 2.5% higher in the first 10 months of the year compared to 2015, media quoted the statistics committee as saying. This is important for Kyrgyzstan because electricity, generated by its extensive hydropower system, is its main export. It is investing in the so-called CASA-1000 project to send electricity to Pakistan via Afghanistan.

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(News report from Issue No. 309, published on Dec. 16 2016)f

Kyrgyzstan to relax registration rules

DEC. 14 2016 (The Conway Bulletin) — Kyrgyzstan is due to relax a rule introduced last month that had required foreign tourists to register at a local OVIR, an interior ministry unit, if they planned to stay in the country for more than five days, the Eurasianet website reported. It said that the Kyrgyz government would publish on Dec. 19 a list of 90 countries whose citizens needed to register within 30 days of arriving in the country. Tourist companies had complained that the rules introduced in November would be unworkable.

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(News report from Issue No. 309, published on Dec. 16 2016)

Kyrgyz President says Russia should leave Kant

DEC. 1 2016 (The Conway Bulletin) — At a press conference, Kyrgyz president Almazbek Atambayev said that Russia would have to quit its air base at Kant near Bishkek. He didn’t elaborate or give any details but he did say that he wanted all foreign military to quit Kyrgyzstan. Russia has signed a deal with Kyrgyzstan to operate from Kant until 2032. It started operations at Kant in 2003. The US quit its airbase outside Bishkek in 2014.

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(News report from Issue No. 307, published on Dec. 2 2016)

Tajik and Kyrgyz military fire shots

NOV. 28 2016 (The Conway Bulletin) — Shots have been fired by Tajik and Kyrgyz border guards on their shared border, Radio Free Europe/Radio Liberty reported. The border is one of the most tense in Central Asia. RFE/RL said that nobody had been injured in the fighting and that it wasn’t clear if the shots had been fired into the air as warnings or had been aimed at security personnel.

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(News report from Issue No. 307, published on Dec. 2 2016)

PepsiCo plans expansion in Kyrgyzstan

NOV. 29 2016 (The Conway Bulletin) — US giant food, snacks and beverage manufacturer PepsiCo will expand its production line to produce 2.5 tonnes of cottage cheese annually at its factory in Bishkek. PepsiCo entered the Kyrgyz market in 2010, after buying a 66% stake in Russian dairy producer Wimm-Bill- Dann for $3.8b. It produces its cottage cheese under the Merry Milkman brand.

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(News report from Issue No. 307, published on Dec. 2 2016)

Trump boosts copper, companies in Central Asia benefit

NOV. 25 2016 (The Conway Bulletin) — Copper prices have gained around 12% to a 16-month high of $2.67/lb, since the election of Donald Trump as US president-elect, showing the power of his words.

Trump’s plan to invest $1 trillion in overhauling ageing infrastructure across the United States gave a boost to the global market price of copper, a key element for large construction projects.

Companies in Central Asia that focus on copper production, chiefly Central Asia Metals and KAZ Minerals in Kazakhstan, also benefited from the Trump effect on copper prices.

Both companies saw their share prices soar in the London Stock Exchange by around 20 – 25% in the past two weeks, a sign that the commodity slump could timidly start to reverse.

Central Asia Metals seized the opportunity to acquire a new deposit in Kazakhstan this week, which showed just how bullish the market has become.

Zak Mir, an analyst for the Proactive Investor website, said that Central Asia Metals’ stock price, which is already at its historical high, is on track to reach 240p/share within the next few months. This would be almost double this year’s low of 124p/share.

It’s been a roller coaster year for commodity companies in the region and this doesn’t look like changing.

Despite the uncertainty, the metals market might well reverse their downward trend before oil prices start growing again, marking an important split between the two sectors.

The Central Asian and South Caucasus region has been badly hit by the fall in commodity prices in the last two years. Any sign of recovery is good news.

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(News report from Issue No. 306, published on Nov. 25 2016)

White Cliff progresses in Kyrgyzstan mine

NOV. 22 2016 (The Conway Bulletin) — Australian miner White Cliff said it had successfully drilled new holes in the quartz zone of its Aucu mine in Kyrgyzstan, recovering high grade ores that yielded significant gold and copper volumes. White Cliff owns a 89% stake in Aucu, which is located 350km west of Bishkek.

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(News report from Issue No. 306, published on Nov. 25 2016)