Thursday, January 31st 05:27 PM IST

Gold remains key to Kyrgyzstan GDP

# Kyrgyzstan gold  # Kumtor  # gold reserves  # Centerra  

The impoverished nation is demanding a more generous deal from Centerra Gold, the powerful Canadian company that has operated the mountaintop Kumtor mine for the past 16 years.

BISHKEK(BullionStreet): Kyrgyzstan remained third in gold production among former soviet republics with an averge yearly production of 20 ton.

According to country's Economy Ministry, nearly $2 billion earnings from gold accounted for 12 percent of Kyrgyzstan's GDP.

Analysts said Kyrgyzstan, also world's 22nd largest gold producer, holds abundant gold deposits in the country's Tien Shan mountains, which have proved a vital economic lifeline.

However, they warned that Kyrgyzstan's dependence on Kumtor comes with its own risks.

Last year, the country's GDP unexpectedly dipped 0.9 percent when a shift in ice formations near the open-pit mine reduced the company's annual output by an estimated 10,000 ounces of gold.

The impoverished nation is demanding a more generous deal from Centerra Gold, the powerful Canadian company that has operated the mountain top Kumtor mine for the past 16 years.

Since 1997, more than 8.4 million ounces of gold have been extracted from the isolated, snow-capped Tien Shan range.

Centerra says production forecasts are back on track for 2013 and that Kumtor is aiming to produce an average of 650,000 ounces of gold a year for the next decade.

The company is also investing $13 million a year in exploration and says it has located an additional 1.8 million ounces of high-grade deposits that could keep the mining company busy long beyond the end of its current contract in 2042.

How about a fully featured Android App for your business?

Most Popular

Bullion Street Newsletter