Stans Energy plans to recover damages from Kyrgyzstan
The Canadian Stans Energy Corp. plans to claim compensation of damages, caused by the revocation of licenses on the development of “Kutessay-2″ rare earth elements (REE) field and Kalesay beryllium field in the Kyrgyz Republic, by the Kyrgyz government in the international court.
As part of these plans, the company has already filed a lawsuit to the UN Permanent Court of Arbitration. The extent of a lawsuit is CDN$302.33 million, of which CDN$176.3 million is the company’s investments in the development of the field and the remaining CDN$125,03 million as lost profits.
The Government of the Kyrgyz Republic has an opportunity to submit their objections to the lawsuit by February 17 of the current year.
Stans Energy Corp won the right for the development of Kutessay-2” (which is characterized by high content of REE, bismuth, molybdenum and silver) and Kalesay fields (beryllium, plumbum), which are located in the Kemin district of the Chui region of Kyrgyzstan in 2009. The cost of the license was US$1 million, while the contract for the development of both fields was signed until 2029.
Two years later the Kyrgyz government had accused the Canadian investor in non-compliance with earlier agreements and revoked the license for the development of the fields.
The Canadian company, from its side, had founded these claims as unfounded, as, according to its spokesman, it was unable to develop the fields during the period of 2010-2011, due to force majeure, which were caused by the April 2010 events, and the overthrow of the regime of the former President of the country Kurmanbek Bakiyev (who escaped out of the country), which resulted in the suspension of operations of all the state bodies of Kyrgyzstan for a certain period of time. According to Stans, Kutesay Mining, its subsidiary in Kyrgyzstan was unable to receive an approval from the Kyrgyz State Geology Agency on the development of both fields for two years.
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Such a decision forced Stans to file a lawsuit against the Kyrgyz government at that period of time, demanded compensation in the amount of $118.2 million and won the trial, which took place at the Court of Arbitration of the Moscow Chamber of Commerce.
For the execution of a judgment, the Supreme Court of Ontario in October 2014, at the request of Stans Energy Corp arrested the 60.76% stake, owned by the Kyrgyzstan in the Centerra Gold Inc company, a Canadian based gold mining company and the largest western-based producer in Central Asia and the former Soviet Union, valued at US$233,12 million, however the Moscow Arbitration Court overturned the decision of the Canadian Court in April 2015, which resulted in the lift of an arrest of the shares, while The Supreme Court (SC) of the Russian Federation confirmed the legality of the cancellation of arbitration decision of the Moscow Arbitration Court on January 13th.
Both fields once again were put into for tender by the Kyrgyz government at the end of January of the current year. The cost of the license is US$10 million.
Eugene Gerden is an international free-lance writer, based in St. Petersburg, who specializes on writing in the field of mining, metals and rare earth metals. ... <Read more about Eugene Gerden>