* Production reduced as blockade interrupts fuel, other
* Mill continues to operate, company says will make 2011
* Protesters say will remove roadblock on Tuesday
By Julie Gordon and Olga Dzyubenko
TORONTO/BISHKEK, Dec 5 A group of
protesters in Kyrgyzstan said on Monday they would remove a
week-long roadblock that has interrupted supplies to Centerra
Gold's Kumtor mine in the restive Central Asian republic
after striking a deal for more community involvement.
Toronto-listed Centerra Gold had said it was reducing
activity at the open-pit mine, which contributes nearly 10
percent of Kyrgyzstan's gross domestic product, after the
blockade at a marshaling yard disrupted fuel and other supplies.
The company, owned 33 percent by the Kyrgyz state, said the
mill at Kumtor was continuing to operate and that it believed it
would still meet its 2011 production forecast of between 580,000
and 600,000 ounces.
The economy in Kyrgyzstan, a mountainous former Soviet
republic of 5.5 million, relies heavily on output from Kumtor
and remittances from migrant workers. Per capita GDP of $843 is
less than a tenth of that in oil-rich neighbour Kazakhstan.
Centerra said in a statement the protesters were seeking
greater benefits from the Kumtor project, one of the
highest-altitude gold mines in the world and contributor of
nearly half of Kyrgyzstan's industrial output last year.
The protesters had blocked deliveries to and from the
marshaling yard in Balykchy, a town 270 km (168 miles) from the
mine at the western tip of Lake Issyk-Kul, where fuel, chemical
and food supplies are transferred from rail cars to trucks.
Two of the protesters told Reuters by telephone they were
preparing to remove the roadblock on Tuesday morning after
Centerra Gold agreed to open a micro-credit organisation for the
residents of Balykchy.
Centerra Gold already operates a micro-credit agency in
Tamga, a town at the foot of the valley near the mine, among
several other community-oriented projects in the country.
"All movement will be completely restored tomorrow," said
protester Samat Aliyev. "The company will participate more in
the life of local society."
Stalbek Akeyev, among 30 people maintaining the blockade on
Monday evening, said he was removing the yurt, a traditional
felt tent used by nomads, where protesters had gathered. At the
peak of the blockade, up to 100 protesters were present.
"We reached a compromise decision. A micro-credit
organisation will be opened and from tomorrow the blockade of
the yard will end," he said.
Centerra Gold did not comment on the specific demands of the
protesters. The company said in the statement that the main road
access to Kumtor had not been affected.
John Pearson, vice-president for investor relations, said
Centerra Gold was working with local authorities and the Kyrgyz
government and he was "hopeful" the blockade would end soon.
STAMPING OUT CORRUPTION
Kyrgyzstan's incoming president, Almazbek Atambayev, has
vowed to stamp out the corruption that has stifled previous
attempts to develop a viable mining industry in a country that
has seen two revolutions in the last six years.
Anti-corruption watchdog Transparency International ranked
Kyrgyzstan joint 164th of 183 countries in its 2011 Corruption
Perceptions Index, level with Yemen, Guinea and Cambodia.
Other mining and exploration companies have suffered
disruption at their projects across the country, including a
joint venture run by South African miner Gold Fields,
where men on horseback attacked a geologists' camp in October.
Centerra Gold is the biggest and most successful mining
enterprise in the country, having produced 7.8 million ounces of
gold between its launch in May 1997 and the end of 2010.
"This is a crime against the people of Kyrgyzstan," said
Valentin Bogdetsky, chairman of the Kyrgyz Mining Association.
The company now operates under a 2009 deal that gave the
Kyrgyz state a 33 percent in the company, which also mines gold
in Mongolia. It pays a 14 percent revenue-based tax: 13 percent
to central government and 1 percent to the local region.
Aliyev, the first protester, is a member of a commission of
members of parliament and local interest groups set up to
re-examine the 2009 deal. Pearson said this was a matter for
protesters to take up with the government.
He said there was no safety issue, other than the need to
conserve diesel to be certain there is enough to operate back-up
generators. Trucks had slowed production to conserve fuel, he