Centerra Gold Inc. has begun bankruptcy proceedings for its Kyrgyzstan operations in the latest twist in the company’s heated dispute with the former Soviet Republic.

In a release late Monday, Centerra said its Kumtor Gold Company (KGC) and Kumtor Operating Company (KOC) units had begun Chapter 11 bankruptcy proceedings in the United States, a move the company said is designed to preserve the value of those operations after the Kyrgyzstani government effectively seized control of the operation in May.

That seizure came mere weeks after the Kyrgyzstani government swiftly passed a law allowing the country to install “external management” on companies that operate in the country under concession agreements if the state deems a project to pose an imminent risk to human life or health.

Centerra’s Kumtor mine is the only such project in the country that would be subject to that law.

In a release, Centerra President and Chief Executive Officer Scott Perry said the miner has unsuccessfully sought to engage the Kyrgyzstani government on the file, only to be rebuffed.

“We have repeatedly asked the Kyrgyz government to discuss its concerns with us, yet it has refused to engage with us in any way,” he said.

“While we remain willing and available to hold a constructive dialogue with the Kyrgyz authorities, we will continue to use all available legal and financial means to protect the interests of Centerra and its stakeholders from the government’s concerted and premeditated effort to take control of the Kumtor mine.”

Kumtor is of key importance not only to Centerra, but to the Kyrgyzstani economy. The mine, which produces an average of 556,000 ounces of gold per year, is the country’s largest private-sector employer. It also accounts for 12.5 per cent of overall Kyrgyzstani GDP and more than a fifth of industrial output.