Kirghiz demonstrators close road to Canadian gold mining

"The main demand is to cancel this agreement. If it is not done today, the protesters will start moving up to block the mine," Naris Kalchayev, a local youth leader and an organiser of the road block, told Reuters by telephone.

Kirghiz demonstrators close road to Canadian gold mining

World Bulletin/News Desk

Hundreds of villagers blocked the only road to Centerra Gold Inc's flagship gold venture high in Kyrgyzstan's Tien Shan mountains on Wednesday, threatening to move in on the mine unless the government tears up its agreement with the investor.

The Kumtor mine, set some 4,000 metres (13,000 ft) above sea level, has long been the focus of infighting among political forces and regional clans in a nation that has seen two presidents toppled since 2005.

Nationalist deputies and groups are calling for the nationalisation of the mine and parliament has set a deadline of June 1 for the government to renegotiate - or repudiate - a deal struck in 2009 with Toronto-listed Centerra to operate the mine.

A state commission said Centerra has been paying too little to run Kumtor and accused it of environmental damage leading to $457 million in fines. The gold mine is the largest operated in Central Asia by a Western company and alone worth roughly 12 percent of Kyrgyzstan's economic output.

"The main demand is to cancel this agreement. If it is not done today, the protesters will start moving up to block the mine," Naris Kalchayev, a local youth leader and an organiser of the road block, told Reuters by telephone.

Several Kyrgyz parliamentarians told Reuters that the government was unlikely to meet the June 1 deadline, because it needed a few more weeks to work closely with its legal consultants before making a final decision.

Centerra said its operations at Kumtor had so far not been affected by the protest which began on Tuesday but warned gold production and its results would be hit if the road block was not removed soon.

Ice movement in Kumtor's open pit cut output by 46 percent to 315,238 ounces in 2012, but the company expects production to rebound to between 550,000 and 600,000 ounces this year.

"MOB POWER" IN ACTION

A Kumtor worker, who declined to be named, said he had seen some 300 protesters blocking a bridge at a gorge near Kumtor.

"Many of them are aggressive and in an agitated mood," the KOC worker told Reuters by telephone from the area near the Chinese border. He said they had laid out five traditional yurt felt tents and were guarded by two dozen men on horseback.

"These are mainly residents of four local villages, and their number is growing. Locals bring them food," he said. "They demand that the prime minister should come and meet them."

Zhantoro Satybaldiyev was elected prime minister by parliament last September, pledging to fight corruption and alleviate widespread poverty in the mainly Muslim nation of 5.5 million which hosts both Russian and U.S. military air bases.

The mountainous nation, where gross domestic product per head is less than a tenth of that in oil-rich neighbour Kazakhstan, holds ample reserves of precious and rare earth metals and mercury discovered by Soviet geologists.

But vested interests of powerful local clans, which often defy the authority of central government, have kept strategic investors away.

Earlier this month, Kyrgyz president Almazbek Atambayev said "mob rule" had wrecked the sale of Jerooy, the country's second-largest gold field. He said local clans had tripled the asking price for Jerooy to a hefty $300 million, scaring off investors.

In Centerra's case, those blocking its only supply route have also put forward additional demands to the investor, which vary from building new roads, water pipelines, sport gyms and a kindergarten in local villages to providing long-term loans and Kumtor jobs to their residents.

"They are crying for the moon," the Kumtor worker said. "What they want is actually the prerogative of the government, not Kumtor." 

Last Mod: 29 Mayıs 2013, 13:51
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