After almost two years of negotiations between the Kyrgyz Republic and Canadian miner Centerra Gold (TSX:CG) over the future and ownership of Kumtor mine, the Parliament has decided the government should help the mine operate smoothly from now on.
Speaking to local news agency 24.kg, Prime Minister Bakyt Asanov said authorities had been instructed to ensure the operation moves forward while fully protecting the country’s resources, environment and industrial safety standards.
The minister added he is preparing a public statement to clarify the future of Kumtor, which lies near the Chinese border at an altitude of 4,000 metres, and accounts for 60% of the nation’s industrial output.
Earlier this year, rumours circulated pointing to an imminent nationalization of the mine, which was later denied by Kyrgyzstan authorities.
However, the case it not closed just yet. Negotiations between the parties are expected to continue over the summer, while the government evaluates the 2015 mine plan submitted by the company to the relevant government agencies at the end of last year, Azernews reported:
The government instructed these agencies on March 12, 2015 to finalize and approve the plans, which were earlier adopted by the State Agency on Geology and Mineral Resources.
However, Kyrgyzstan’s environmental protection agency requested an extension to July 4, 2015, in order to study the project. The reason for the delay was Kumtor Gold Company’s plan to replace ice masses that would prevent the Davydov glacier from sliding into the open-pit mine.
These activities are contrary to the Water Code of Kyrgyzstan, which prohibits any activity that could impact the natural state of the glaciers or the quality of water contained therein.
According to Centerra, the vast open pit Kumtor gold mine is expected to produce 470,000-520,000 ounces at an all-in sustaining cost between $819-$908 per ounce this year.