Parliament stalls Centerra's plans to ramp up production
Centerra Gold plans to boost production by 50 percent by 2014 to just under one million ounces yearly, said Chief Executive Officer Steve Lang.
At the company's Boroo gold project, it is producing between 50,000 and 200,000 ounces a year using stockpiled ore, but Centerra wants to increase the mill's output to between 150,000 ounces and 200,000 ounces a year with ore from the Gatsuurt deposit 35 kilometers away.
Although the government has delayed permission, Lang remains confident Centerra will ultimately win approval. The problem began in 2009 when the government introduced a new law prohibiting mining development in forested areas or at headwaters, while providing compensation to companies whose license it revoked. Gatsuurt was one of those projects. After Parliament learned it would spend USD 5 billion figure compensating license holders, it decided it would enforce the law in stages. The first victims were about 500 mainly local alluvial miners. The companies decided to sue after it became apparent the state would struggle to pay the USD 500 million due to them. In response, Prime Minister S. Batbold suspended the law, and the miners dropped their case. A Parliamentary committee amended the legislation. Those amendments will supposedly allow operations at Gatsuurt. After Parliament returned from its summer recess this fall, 20 MPs demanded a renegotiation of the Oyu Tolgoi investment agreement to increase government’s stake in the project to 50 percent ahead of schedule. Eventually the government dropped the issue after investors began to feel disillusioned with investment opportunities in Mongolia. The affair impacted Centerra, however, because the amendments fell from Parliament’s priority list, said Lang. He said although the situation was frustrating, it is perhaps best not to push an issue he perceived to be “an internal Mongolian matter.” The upcoming 2012 election could further delay the approval of the Gatsuurt project. Other growth will come from Centerra’s flagship Kumtor mine. The Kumtor and Gatsuurt project combined would lift Centerra’s output by about 50 percent to just under one million ounces annually in about three years, said Lang.
Source : News.mn
At the company's Boroo gold project, it is producing between 50,000 and 200,000 ounces a year using stockpiled ore, but Centerra wants to increase the mill's output to between 150,000 ounces and 200,000 ounces a year with ore from the Gatsuurt deposit 35 kilometers away.
Although the government has delayed permission, Lang remains confident Centerra will ultimately win approval. The problem began in 2009 when the government introduced a new law prohibiting mining development in forested areas or at headwaters, while providing compensation to companies whose license it revoked. Gatsuurt was one of those projects. After Parliament learned it would spend USD 5 billion figure compensating license holders, it decided it would enforce the law in stages. The first victims were about 500 mainly local alluvial miners. The companies decided to sue after it became apparent the state would struggle to pay the USD 500 million due to them. In response, Prime Minister S. Batbold suspended the law, and the miners dropped their case. A Parliamentary committee amended the legislation. Those amendments will supposedly allow operations at Gatsuurt. After Parliament returned from its summer recess this fall, 20 MPs demanded a renegotiation of the Oyu Tolgoi investment agreement to increase government’s stake in the project to 50 percent ahead of schedule. Eventually the government dropped the issue after investors began to feel disillusioned with investment opportunities in Mongolia. The affair impacted Centerra, however, because the amendments fell from Parliament’s priority list, said Lang. He said although the situation was frustrating, it is perhaps best not to push an issue he perceived to be “an internal Mongolian matter.” The upcoming 2012 election could further delay the approval of the Gatsuurt project. Other growth will come from Centerra’s flagship Kumtor mine. The Kumtor and Gatsuurt project combined would lift Centerra’s output by about 50 percent to just under one million ounces annually in about three years, said Lang.
Source : News.mn
Comments
Post a Comment