JOHANNESBURG (miningweekly.com) – Gold producer Centerra Gold was confident that the 2009 Kumtor project agreements with Kyrgyz Republic government authorities would hold up under proposed renegotiations surrounding its flagship mine.

This was in response to media reports quoting Kyrgyz Minister of Economy and Antimonopoly Policy Temir Sariev’s call for negotiations to be opened into how the gold miner’s flagship mine was governed.

Sariev is quoted as proposing, in Kyrgyz-based media, that the Canada-based company accept a new tax regime and pay higher environmental charges.

Centerra said over the weekend that the agreement-governed project, as approved by the Kyrgyz Republic government and Parliament, provided for a specified tax regime to apply to all Kumtor-related activities.

“The agreements would be subject matter of a legal opinion issued by the Kyrgyz Republic Ministry of Justice and a decision by the Kyrgyz Republic Constitutional Court,” Centerra said, adding that the agreement allowed for disputes to be resolved by international arbitration, if necessary.

The Kumtor project was currently under scrutiny following allegations of environmental damage and noncompliance at the mine.

The Kyrgyz Republic Parliament established a State Commission, chaired by Sariev, to inspect and review Kumtor’s compliance with the republic’s operational and environmental laws, as well as regulations and community standards.

The commission, which previously challenged the validity of the agreements, also alleged inefficient or improper management of the Kumtor mine, regarding customs practices, tax and social fund payments, operational decisions, procurement practices and mill efficiencies.

The commission called for the cancellation of the current Kumtor project agreements and the creation of a new State-owned Kyrgyz Republic entity to assume control over the Kumtor mine.

However, during a government meeting last week, Prime Minister Zhantoro Satybaldiyev confirmed that there was no intention of nationalising the project and indicated interest in entering discussions with Centerra.

“Centerra expects to continue discussions with the government of the Kyrgyz Republic, with the objective of resolving matters through constructive dialogue,” the group said, adding, however, that there could be no assurance that this would be the case.

The Kumtor mine continued normal operations.