TORONTO (miningweekly.com) – Canadian miner Centerra Gold has suspended operations at its flagship Kumtor gold mine, in Kyrgyzstan, after protestors, who have been blocking the road leading to the mine, cut the mine’s power supply.
The mine had started an orderly shutdown of the milling facility using back-up diesel-generated power. The camp and other facilities at site were also operating on back-up power.
Mining operations, other than those to manage the ice and waste in the high movement area of the openpit, had also been suspended.
Centerra said it continued to cooperate closely with the Kyrgyz government and local authorities to find a peaceful resolution to the situation, but said if grid power and road access were not restored in a timely manner, the company expected that there would be a material negative impact on its operations, including its gold production and financial results.
The gold miner on Tuesday said the illegal protest was interfering with the movement of supplies and personnel to and from the mine.
The company believed it would be able to resolve the situation with the help of local authorities and the Kyrgyz government, but could not offer any guarantees that it would succeed in resolving the protest action.
Earlier this month, unexpected waste movement had again forced Centerra Gold to adjust plans at Kumtor, following the faster-than-expected waste movement in a large section of Kumtor's main Davidov Valley waste-rock dump.
Centerra said that, starting in mid-March, the rate of movement of the waste-rock dump increased by more than the company had expected and required an accelerated effort to relocate certain mine infrastructure. Employees in the affected buildings had to be moved to temporary work locations, until new facilities were built.
The waste-rock movement had required certain mine infrastructure, including workshops, administrative facilities and electrical substations, to be relocated. Centerra said it had expedited this process to ensure continued safe operations and, to date, planned gold production had not been affected.
As a result of the increased movement, the company was now placing waste rock on permitted sites currently unaffected by the movement and was working on an alternative long-term waste-rock dumping plan.
The gold miner said it was working with the Kyrgyz regulatory authorities and external engineering advisers to fast-track approval of such a plan and, based on discussions with the authorities, the company believed such approvals were likely to be forthcoming, but could not be guaranteed.
In the event that an alternative plan could not be developed or approved promptly, the company would expect a negative impact on its mine operations, production and financial results.
The Kyrgyz government had established a special commission to visit the Kumtor mine site and inspect the waste-rock dump movement.
Meanwhile, Kyrgyzstan, in February, gave Centerra three months to redraw terms before ripping up an agreement to run its flagship mine, accusing the Canadian miner of "colossal" environmental damage and underpaying the State.
The company, whose share price has halved since the Kyrgyz government said in June it would review the mine deal, said the 2009 agreement was "solid and transparent", adding that it had already started talking to government.
The Kumtor mine, bisected by a glacier 4 000 m above sea level, is the largest gold mine in Central Asia operated by a Western company. It is the industrial centrepiece of the fragile Kyrgyz economy, contributing 12% of gross domestic product (GDP) in 2011.
Kyrgyzstan's GDP contracted by 0.9% last year after Centerra reduced output at the mine by 40% as a result of the ice movement in the pit.
The company’s TSX-listed shares traded as high as C$4.36 apiece in early morning trade on Thursday, but later dropped back to C$4.12 a share, which was 3.53% higher than Wednesday’s close.