* Parliament sets Sept 10 deadline for new Kumtor mine deal
* Snubs PM's request for more time to negotiate
* Creating new Kyrgyz-registered Kumtor venture is an option
(Adds quotes, details, background)
By Olga Dzyubenko
BISHKEK, June 5 Kyrgyzstan's parliament has set
a new Sept. 10 deadline for the government to agree an improved
mining deal with Canada's Centerra Gold or unilaterally
cancel the current arrangement.
Centerra, which runs the central Asian nation's flagship
Kumtor gold mine, has come under pressure to revise a deal
struck in 2009 after a state commission said it was underpaying
the government and had caused "colossal" environmental damage.
Last week, hundreds of protesters forced a brief stoppage to
production at the mine, hidden high in the Tien Shan mountains
near the Chinese border.
In late February, the legislature gave the government three
months to strike a new deal with Centerra, but the government
missed a June 1 deadline, saying it needed more time for talks.
These include a proposal for Kyrgyzstan to swap its stake in the
Toronto-listed company for joint ownership of Kumtor.
After hours of heated debates, the new deadline was adopted
by a 65-5 vote.
"There are three options. The first is to redraw the 2009
agreements and start working in line with Kyrgyz laws, including
taxation," Economy Minister Temir Sariyev said before the vote.
"Second, Centerra proposes to establish a joint venture at
the Kumtor mine by unbundling Kumtor from Centerra. The third
option is to cancel (the 2009) agreements."
During the debates, two of the five parties represented in
Kyrgyzstan's parliament demanded nationalisation of the mine,
which underpins the shaky economy of the politically volatile
nation that has seen two presidents toppled since 2005.
Prime Minister Zhantoro Satybaldiyev, who has ruled out
Kumtor's nationalisation, had asked deputies to give his cabinet
at least until Oct. 1 to complete talks with Centerra.
Centerra said on Tuesday that Kyrgyzstan was in talks with
its management to swap its one-third stake in the company for
joint ownership of Kumtor.
It said that, according to the latest proposal, state gold
company Kyrgyzaltyn would exchange its 32.7 percent interest in
Centerra for "an interest of equivalent value" in a joint
venture that would own the Kumtor project.
In a separate statement, the government said the size of the
Kyrgyz stake in the prospective venture would be determined by
"independent financial consultants" appointed by both parties.
The government said PricewaterhouseCoopers was
appointed financial adviser for its talks with Centerra and DLA
Piper as legal adviser.
It said the proposed restructuring would generate
"significantly" more cash flow for the government than the
"The government is taking the firm position that the
restructuring option should provide the Kyrgyz side with control
of the joint venture," the government said in the statement on
its website, www.gov.kg.
"Other options would be unsatisfactory to the government, to
parliament and to society," it added.
It said the joint venture would be registered in Kyrgyzstan
and governed by a board comprising an equal number of
representatives of Kyrgyzaltyn and Centerra. Chairmanship of the
board would be rotated annually.
(Writing by Dmitry Solovyov; Editing by Elaine Hardcastle and