Canada’s Centerra Gold (TSX:CG) received Wednesday yet more bad news from Kyrgyzs authorities as a court ruled that its local subsidiary, Kumtor Operating Company (KOC), must pay about $98 million in fees related to their mine waste.
The move follows another court decision Monday ordering Kumtor, the country’s biggest gold miner, to pay a $10,000 fine.
This time, Kyrgyzstan’s environmental inspection authority decided that Kumtor’s placement of waste rock on its waste dumps was subject to tariffs, which are normally applied to industrial or domestic waste.
A company’s spokesperson told MINING.com Centerra would appeal the charge as it considers it to be without merit.
The string of penalties come less than a month after prosecutors raided Centerra’s offices in the Central Asian republic to collect documents related to a separate criminal case alleging financial violations by the firm.
The fines are also one of the latest signs of renewed tensions between the Kyrgyzstan government and the firm, which have been locked in a bitter dispute over Kumtor’s structuring for over two years.
The government wants to swap its 32.7% stake in Centerra for half of a joint venture that would control the Kumtor gold mine, Kyrgyzstan’s largest bullion operation, which lies near the Chinese border at an altitude of 4,000 metres.
Centerra once suggested a 50/50 joint venture, but former prime minister Joomart Otorbayev said last year that such deal would not be in the country’s interests. Rumours pointing to an imminent nationalization of the mine quickly spread out after that, but were later denied by Kyrgyzstan authorities.
Otorbayev resigned later that month after failing to clinch the restructuring deal. His successor, Temir Sariyev, said at the time that resolving the issue would be among his priorities.
Kyrgyzstan’s environmental and technical safety authority has filed several lawsuits against Centerra’s subsidiary for a total of about $103 million. Wednesday’s ruling was just the second one of those.
The vast open pit Kumtor gold mine is expected to produce 480,000-530,000 ounces at an all-in sustaining cost between $817-$902 per ounce this year.