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Kyrgyzstan passes law to take control of Kumtor gold mine

Credit: REUTERS/SHAMIL ZHUMATOV

Kyrgyzstan's parliament has passed a law allowing the state to temporarily take over the country's biggest industrial enterprise, the Kumtor gold mine operated by Canada's Centerra Gold, a business lobby group said on Friday.

BISHKEK, May 7 (Reuters) - Kyrgyzstan's parliament has passed a law allowing the state to temporarily take over the country's biggest industrial enterprise, the Kumtor gold mine operated by Canada's Centerra Gold CG.TO, a business lobby group said on Friday.

The bill, passed in three readings late on Thursday, allows the government to take over the management of Kumtor for up to three months in case its activity poses danger to human lives or the environment.

Kumtor accounts for a fifth of the Central Asian nation's total industrial output.

Centerra said in a statement it was committed to continuing to work with Kyrgyz authorities to resolve any outstanding issues in accordance with existing agreements.

It also said the Kumtor mine's environmental performance adheres to international standards and it "believes strongly" Kyrgyz claims against it are without merit.

It said, however, no assurances could be given that any of the current or future legal claims could be resolved "without a material impact on the company".

Kyrgyzstan's International Business Council said in a statement the passing of the law was shocking and could have negative long-term consequences.

The Bishkek government has a history of disputes with Centerra Gold.

Centerra said it had received back tax claims in excess of U.S. $170 million from Kyrgyzstan, which it was analysing, and a civil claim against its Kyrgyz venture requesting that its past practice of placing waste rock on glaciers be determined to be illegal.

The claimants have amended their claim to demand over $3 billion in environmental damages in favour of the Kyrgyzstan, Friday's statement from Centerra said.

President Sadyr Japarov, who came to power after violent riots last October, once campaigned for the nationalisation of the mine, although he has said after assuming his post he no longer considered that necessary.

(Reporting by Olga Dzyubenko Writing by Olzhas Auyezov; editing by Barbara Lewis)

((olzhas.auyezov@thomsonreuters.com; +7 727 2508 500; Reuters Messaging: olzhas.auyezov.thomsonreuters.com@reuters.net))

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