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Mongolia
Centerra aims to increase Boroo production
CENTERRA Gold is hoping to increase annual gold production
from its Boroo project by more than 300% by 2014 as part of a
plan to boost overall production at all operations to just under 1
million ounces. The Canadian company is also aiming to increase
output at the Kumtor mine in the Kyrgyz Republic.
At Boroo the company is currently producing at an annual rate
of around 50,000 ounces using stockpiled ore, but wants to increase
the mill’s output to between 150,000 and 200,000 ounces
by feeding it with ore from the Gatsuurt deposit 35km away. Permitting
issues have delayed Centerra’s plans but it remains confident
that these will be resolved by the Mongolian Government.
The Boroo Gold Project where Centerra Gold is planning to increase production.
The problems began in 2009 when the government introduced
a new law that blocked any mining development in forested areas
or at headwaters, and Gatsuurt is in this category. The legislation
said that miners that lost previously held licences would be compensated.About
a year ago the government completed a study
of how many permits were affected and what levels of compensation
it would have to pay out. It came up with a figure of more
than $5 billion to compensate the holders of around 1700 licences
that were to be revoked.
Despite the amount of compensation, the government decided
it would implement the law but would do so in stages. The first to
pay would be around 500 alluvial miners, mainly local companies,
however, the compensation still amounted to $500 million, a hefty
price tag for the government, so the companies that had licences
revoked decided to collectively sue it.
As a result, Prime Minister Sukhbaatar Batbold suspended the
enforcement of the law, and the miners dropped their case. He
formed a parliamentary committee that came up with amendments
to the legislation to make it more practical, which would
have allowed Gatsuurt to progress.
Parliament broke off shortly after for the summer recess and before
the amendments had gone to vote. Upon its return, a group
of 20 parliamentarians demanded that the PM renegotiate an investment
agreement with the owners of the giant Oyu Tolgoi copper-gold
mine. They, in turn, refused to budge on the agreement
with the government ultimately backing down.
This distracted the Parliament from amendments to the environmental
legislation and Centerra is uncertain whether the Gatsuurt
issue will be resolved before general elections set for June
this year but is cautiously optimistic that it eventually will be.’
January/February 2012 | ASIA Miner | 33