UPDATE 3-Kyrgyzstan sets deadline to revise Centerra Gold deal

Thu Feb 21, 2013 7:47pm EST
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* Government to cancel contract if no compromise

* Insists Centerra must pay for environmental damage

* Centerra says facing new government claim for $315 mln

* Centerra says 2009 deal "solid"; open to talks

By Olga Dzyubenko and Bhaswati Mukhopadhyay

Feb 21 (Reuters) - Kyrgyzstan has given Centerra Gold three months to redraw terms before ripping up an agreement to run its flagship mine in the Central Asian country, accusing the Canadian miner of "colossal" environmental damage and underpaying the state.

Centerra said it had received a new claim from the government for $315 million for alleged environmental destruction, almost tripling the damages claims that it faces.

Parliament ended two days of fierce debate by passing a resolution on Thursday demanding the government revise a deal struck in 2009, a year before then-president Kurmanbek Bakiyev was driven from power by a popular revolt.

"If within three months our negotiations yield no results, the government will unilaterally cancel the agreement," Economy Minister Temir Sariyev said during the debate on Wednesday.   Continued...