In a new twist to the long-running tug-of-war between the Kyrgyz Government and Canadian company Centerra Gold over the Kumtor Gold Project, the Environmental Protection and Forestry Agency is suing Centerra for the equivalent of about US$304 million over what it says is ecological damage.

The state agency says has filed the lawsuit at an economic court in the Kyrgyz capital Bishkek, saying Centerra Gold had ignored its earlier request for voluntary compensation. It says the alleged ecological damage includes “emissions of pollutants and waste dumps”. It says its claim refers to the company’s operations between 1996 and 2011.

“We rejected these claims at the beginning of this year, and our position has not changed since then,” says a spokesman for Kumtor Operating Company (KOC), the Centerra subsidiary that runs the mine in the Tien Shan Mountains.

Centerra said previously that it viewed the government’s claim as exaggerated and unfounded. “The company disagrees with these charges and plans to give explanations on this matter in the nearest time,” the KOC spokesman says.

Centerra has been under prolonged pressure from the Kyrgyz parliament, which demands the state hold 67% in a proposed joint venture to run the mine. In September, the government and Centerra signed an MoU, paving the way for Kyrgyzstan to swap its 32.7% stake in the company for 50% in a venture that would own Kumtor, but in October the legislature voted to tear up the document and seek control over the planned venture. It gave the cabinet until December 23 to report on its talks with Centerra.

The Kumtor mine, bisected by a glacier 4000 metres 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, alone contributing 12% of GDP in 2011.

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