Re KGC obligation to perform all reclamation work at the Kumtor mine after the mine closure

Re KGC obligation to perform all reclamation work at the Kumtor mine after the mine closure

published: 08 April 2022

Re “KGC obligation to perform all reclamation work at the Kumtor mine after the mine closure” and “to develop a technical reclamation project in accordance with the Kyrgyz Republic laws on environmental protection and on subsoils, with determination of the amount of funding from the Reclamation Fund for reclamation of the Kumtor project facilities” 

Kumtor Gold Company CJSC (KGC) complies with the environmental legislation requirements in mine closure “including the reclamation of mine facilities” in accordance with the best international practices in the mining industry.

Previously, the Company has developed the Kumtor Mine Closure Plan (MCP) together with international consultants and experts having experience in developing such plans and projects. It includes initial mine closure plan criteria, which were developed during the Feasibility Study period (Reclamation Plan); Revised Conceptual Closure Plan (hereinafter referred to as the “CCP”).

The latest CCP was prepared by SRK in 2019.

KGC will develop a technical reclamation project based on the life of the mine planned until 2031 and will submit a detailed engineering design and mine closure plan to the state regulatory authorities for the state expert review of issues related to construction, industrial safety, and environmental protection.

The cost estimates for the mine closure are developed by internationally recognized experts. Every component of the mine infrastructure is taken into account: open pit, waste dumps, tailings management facility (including water management facilities), as well as decommissioning of other mine infrastructure, short and long-term maintenance, inspections and monitoring of environmental compliance. Standard assumptions, expert opinions, and relevant information are used to estimate the cost of mine closure.

To implement the mine decommissioning project, Kumtor established a Reclamation Trust Fund to conduct reclamation activities at the mine.

In accordance with the Reclamation Trust Fund Agreement, the Company is required to make annual contributions to the Reclamation Trust Fund. This Fund was established by the Company to fund its obligations related to production completion, reclamation and closure of the Kumtor mine. According to the agreement signed on April 4, 2022, control over the reclamation fund in the amount of $53 million will be returned to the Kyrgyz Republic.

As of December 31, 2021, the Reclamation Trust Fund’s balance is US $ 53 million.