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Deal on water-destructive Kumtor mine to go to Kyrgyz parliament

The Kumtor open-pit gold mine is operated by Toronto-based Centerra Gold near Lake Issyk Kul in the northern Tian Shan mountains of the Central Asian country of Kyrgyzstan.

Reuters reports, “Centerra Gold Inc said on Tuesday it has reached a non-binding agreement with the government of the Kyrgyzstan that could pave the way for joint ownership of Kumtor, the country’s flagship gold mine. …Shares in the Toronto-listed Centerra soared as much as 9.8 percent in early trading after it announced the tentative deal in which Kyrgyz Republic would swap its 32.7 percent equity stake in the Canadian miner for a 50 percent ownership interest in the Kumtor mine itself.”

The article adds, “Analysts and investors cheered the new agreement that takes the company a step closer to resolving the controversy that has largely been responsible for dragging Centerra’s share price down nearly 80 percent over the last two years. The agreement ‘is superficially positive as it points to a potential resolution to the current impasse’, wrote RBC Capital Markets analyst Jonathan Guy in a note to clients. ‘If this agreement were to be approved by the parliament in this form then we would view that as a material positive for the company’s shares’, said Guy.”

“The tentative deal would potentially also resolve all legal claims relating to Kumtor, including those around environmental, technical and land use matters. Earlier this month, the country said it was suing Centerra for 15 billion soms ($304 million) over ecological damage caused by the mine.”

In May, Radio Free Europe noted, “(The) gold mine had only been in operation for months (in 1998) when one of its supply trucks crashed through a bridge, dumping more than a ton of toxic sodium cyanide into the Barskaun River. More than 2,500 people were poisoned. …(In a recent protest, one person said), ‘Our women are giving birth prematurely. Our sheep and cows are suffering. Dear leaders, we’re asking very kindly. We don’t need gold. We don’t need silver. We need clean water, healthy and good lives.’ …Kumtor has long raised concerns about the safety of downstream water supplies. The mine sits atop glaciers whose springtime meltwater feeds fresh water into the Naryn River, which flows toward Tajikistan, Kazakhstan, and Uzbekistan. …(The mine’s tailings) are located below a mountaintop body of water, Lake Petrov, which in recent years has swelled in size as a result of increased glacial melt.”

The Kyrgyz parliament will vote on the tentative agreement on December 30.

Further reading
Water concerns drive protests against gold mine in Kyrgyzstan