BISHKEK: 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.
"Kumtor shall work regardless of anything, because if its production stops just for a day, it will be a blow to the country's entire economy," Prime Minister Zhantoro Satybaldiyev was quoted by his press service as saying later on Wednesday.
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.
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