Oxus serves arbitration notice in Kyrgyz gold spat

British miner Oxus Gold Plc. said on Friday it had served a notice of arbitration on the government of Kyrgyzstan in a dispute over development of the Central Asian country’s second-largest gold mine.

Oxus said in a statement it was still in discussions with the Kyrgyz government in an attempt to reinstate a licence to mine gold at the Jerooy deposit.

“If arbitration proves necessary, the next step will be for an arbitral tribunal to be constituted,” Oxus said. Kyrgyz officials could not be reached for comment.

State-owned gold company Kyrgyzaltyn said in April an Austrian firm, Global Gold Holding GmbH, managed by a Cyprus-registered company called Strategic Investment Group Ltd., would take over operation of the Jerooy mine.

Oxus offered in May to cede part of its stake in Jerooy in an effort to win back the licence, which was taken away in 2004 under former Kyrgyz president Askar Akayev.

Oxus has been lobbying the government of President Kurmanbek Bakiyev to reinstate the licence.

Oxus said in the statement it had already spent over $50 million on Jerooy and that construction of the processing plant and related infrastructure was now largely complete.

“Assuming the licence issue can be resolved relatively quickly, first gold production could begin early next year,” the company said.

(Reuters)