Kyrgyzstan names new PM to settle issue with Centerra over Kumtor mine

Kyrgyzstan names new PM to settle issue with Centerra over Kumtor mine

Image from Temir Sariyev’s Twitter account @Temir_Sariev

Kyrgyzstan's parliament has named former economy minister Temir Sariyev as the country’s new prime minister after his predecessor stepped down last week over the over the country's largest gold mine, Kumtor, owned by Canada's Centerra Gold (TSX:CG).

For over two years the parties have been in talks on a deal to swap the government’s 32.7% stake in Centerra for half of a joint venture that would control the Kumtor gold mine.

Joomart Otorbaev, who earlier this month had withdranwn his backing for such 50/50 joint venture, told reporters the direction of his government was "correct", but added there was "a need to move on" and that Kumtor was the main unresolved issue.

The Central Asian country’s new prime minister, a 51-year-old economist, said before Thursday's vote in parliament that resolving the Kumtor issue would be among his priorities.

"Nationalization will only create certain risks and threats for us. We must seek other ways,” he said, according to Reuters.

Kumtor, which lies near the Chinese border at an altitude of 4,000 metres, has been a source of political tension in the impoverished country.

The vast open pit gold mine accounts for 60% of the nation's industrial output and, according to Centerra, it is expected to produce 470,000-520,000 ounces at a all-in sustaining cost between $819-$908 per ounce this year.

Kyrgyzstan names new PM to settle issue with Centerra over Kumtor mine

Kumtor mine (Courtesy of Centerra Gold)