Environmental hurdles add to uncertainty over future of Centerra's Kyrgyzstan mine

Tue Jun 3, 2014 11:12am EDT
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By Olga Dzyubenko

BISHKEK, June 3 (Reuters) - Centerra Gold's development plans for its Kumtor gold mine in Kyrgyzstan could damage the nearby Davydov glacier, the Central Asian state's environment protection agency said on Tuesday, adding to uncertainty about the mine's future.

The Kumtor mine, which lies in the Tien Shan mountains near the Chinese border, has been a source of political tension in Kyrgyzstan, which has been trying to increase revenues from the project.

The environment agency said after looking into Centerra's 2014 plan of works for the mine there were serious concerns the plans could damage the glacier.

"I do not know if the mine will stop or not. If it stops, this will be bad for the economy. But our laws ... do not allow anyone to destroy glaciers," Abdykalyk Rustamov, deputy agency head, told Reuters.

Kyrgyzstan's Water Code bans any kind of industrial activity near glaciers, which are protected as a strategic fresh water reserve, which Kyrgyzstan also supplies to its neighbour Uzbekistan.

Centerra has threatened to begin winding down work at the mine, Kyrgyzstan's flagship joint-venture project, if its new mine plan and related operating permits were not approved by the government by June 13.

The mine, the largest gold deposit in Kyrgyzstan, is a big source of foreign exchange for the country. Centerra has said the project is the main taxpayer and biggest employer in the country of 5.5 million people.

A shut-down of the mine would aggravate the dispute between Centerra and the government, which wants more revenue from the mine.   Continued...