Centerra Gold’s Kyrgyz unit threatens to halt operations unless it gets environmental permits by July

By bne IntelliNews May 30, 2016

Centerra Gold’s subsidiary Kumtor Gold Company warned Kyrgyz authorities that it will be forced to halt operations unless it receives environmental permits to operate beyond June, Akchabar.kg news website reported on May 27, citing the company’s chief executive Daniel Desjardins.

Kumtor Gold operates Kyrgyzstan’s largest gold mine and is the country’s single largest contributor to GDP – it accounted for 6.8% of GDP in 2015. The mine is also the nation’s largest taxpayer and employer. Shutting down Kumtor between July 1 and December 31 would result in losses worth $122mn to the country’s economy, according to Desjardins.

The delay in awarding permits comes at a time when Kumtor Gold is facing fines of millions of US dollars for environmental damages. A court in Bishkek has recently ordered the company to pay over KGS7bn (€92.3mn) in fines. However, the company intends to dispute Kyrgyz authorities’ claims, Desjardins said.

If the mine halts operations for six or eight weeks, Kumtor Gold will not be able to produce gold until the second half of 2017, Desjardins noted. If the mine’s downtime will exceed eight weeks, then the mine could cease operations altogether, Desjardins warned.

Kumtor Gold is currently 100% owned by Centerra Gold. Kyrgyzstan, via state mining firm Kyrgyzaltyn, holds a 32.7% stake in Centerra Gold.

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