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Kyrgyzstan detains ex-PM in gold mine probe

·2-min read

Kyrgyzstan said Monday it had detained a former prime minister over corruption at the country's largest gold mine, the centre of a legal dispute with Canadian firm Centerra.

The giant Kumtor gold mine is the Central Asian country's largest foreign investment project and accounts for around a tenth of the economy.

Kumtor was operated by Centerra Gold but Kyrgyz authorities suddenly seized the mine, prompting the Toronto Stock Exchange-listed company to turn to an international court.

Kyrgyzstan's rubber stamp parliament earlier this month passed a law allowing authorities to temporarily seize the mine and appoint "external management" to remedy address environmental and safety problems.

On Monday, the country's security service said it had detained a popular former prime minister, Omurbek Babanov, as part of a probe into corruption "at various stages of the development" of the Kumtor project.

Babanov, 51, served as prime minister in 2011-12.

Centerra said this month it was "no longer in control of the Kumtor Mine and can no longer ensure the safety of the mine's employees or operations" after government officials entered the mine and raided company offices in Bishkek on the weekend of May 15-16.

The escalation came after a state commission said Kyrgyzstan was seeking over $4 billion (3.2 billion euros) in environmental and unpaid tax claims from Centerra, which has denied any wrongdoing.

Kyrgyzstan has since appointed its own management team to run the mine but President Sadyr Japarov said last week the government had not ruled out reaching a deal with Centerra.

As an opposition politician, Japarov led an unsuccessful bid to nationalise the mine both inside parliament and on the streets, where he oversaw several rallies against the company.

He rose to power in October during a political crisis that saw him first freed from jail where he was serving time for hostage-taking.

Japarov has always insisted that the conviction was triggered by his opposition to Centerra.

Babanov was one of Japarov's main rivals in last year's power struggle that prompted then-president Sooronbay Jeenbekov to resign, allowing Japarov to become leader.

Centerra said this month that it has filed for international arbitration against Kyrgyzstan in a bid to defend its star asset.

This is the third time the two parties have locked horns in international courts.

Two previous disputes were solved with new revenue-sharing agreements for the mine.

tol-cr/as/ach

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