Centerra Gold Mining License Voted for Review and Revision by Kyrgyzstan Parliament
The parliament of Kyrgyzstan has voted to review and revise the operating licence the country has awarded to Canadian miner Centerra Gold over the Kumtor gold mine project.
The Kumtor gold mine project, in operation since 1997, accounts for 12 per cent of the Central Asian nation's economy.
The gold mine project, as well as the mining company operating it, recently got into the spotlight on allegations of environmental problems, poor company management as well as unbalanced profit sharing.
The Kyrgyzstan lawmakers urged the national government to review and revise Centerra Gold's operating license and contract which was awarded in 2009. Centerra Gold is already 33 per cent owned by Kyrgyz state gold company Kyrgyzaltyn, but the lawmakers moved to a bigger controlling stake in the company.
In a statement in February, Centerra Gold reported producing 583,156 ounces of gold at the Kumtor gold mine project in 2011, which is 4,000 meters above sea level some 50 kilometers from the border with western China.
Proponents to the revision of Centerra Gold's operating license questioned the authenticity of the operating agreement, claiming the profit ratio sharing is unequal and deprived Kyrgyzstan of much deserved revenue.
"Any discussions of the Kumtor project must take into account existing legal obligations and binding commitments," Ian Atkinson, Centerra Chief Executive Officer, said in statement.
Shares of Centerra dropped 1.7 per cent to C$9.88 at the close in Toronto on Wednesday. It fell 26 per cent on June 22, the most in three years, when the company announced a parliamentary report alleged its operations in Kyrgyzstan had produced environmental damage to the country.