Skip to main content
new

A view shows the Kumtor gold mine during a visit by Kyrgyzstan's Prime Minister Zhantoro Satybaldiyev in the Tien Shan mountains October 1, 2012. Toronto-based Centerra said a driver died while operating an excavator on the weekend.Vladimir Pirogov/Reuters

An employee of Canadian gold company Centerra Gold Inc. has been killed in an accident at its huge Kumtor mine in the Kyrgyz Republic, the third fatality at the same site in the past few months.

Toronto-based Centerra said a driver died while operating an excavator on the weekend. The rig tipped and slipped into a water-filled basin at the high-altitude mine.

The mid-sized gold producer is working with regulators and state authorities to determine the cause of the accident.

The Kumtor open pit gold mine in the landlocked country of Kyrgyzstan in Central Asia is Centerra’s biggest operation by far. Last year, the facility produced 600,000 ounces of gold, or about three-quarters of Centerra’s entire output. The company also has mines in Canada and Turkey.

Over the past few years, Kumtor has been the scene of a number of fatal accidents, one of which led to a criminal investigation into Centerra.

“The ongoing safety record, not just regards to fatalities, but with regards to injuries at Kumtor, is concerning,” Rick Rule, chief executive of Sprott U.S. Holdings Inc., said in an interview.

These incidents put the spotlight on Centerra’s training and safety practices at Kumtor, Mr. Rule said.

In December, two employees went missing and are presumed dead, after a rock slide at Kumtor. The slide caused the mine to shut down for about six weeks. Centerra has not yet disclosed what caused the fatal rock movement.

In 2017, an employee died at Kumtor after their truck rolled over and spilled close to nine million tonnes of fuel.

A year earlier, a mill employee was killed while working the night shift. A criminal investigation was opened into the incident, with Centerra later agreeing to settle the case with the family of the deceased.

“The board has got to come to grips with [problems at Kumtor], and they’ve got to discuss what happens now, and they need to be clear to the investment community what they, and their partners, the Kyrgyz government, plan to do,“ said Mr. Rule, a gold-focused money manager who doesn’t own stock in the company.

Centerra did not respond to multiple requests for comment on Tuesday.

The Kumtor mine went into production in 1997 and is considered to be among the most technically demanding ore bodies in the world to operate. Sitting at an elevation of more than 4½ kilometres above sea level, Kumtor is located in and around a number of big moving glaciers. Accessing ore at Kumtor has historically involved the blasting of glacial ice. As far back as 2002, when the mine was operated by uranium producer Cameco Corp., ground movement at the site killed a worker, and operations were temporarily shut down.

Centerra took over ownership of Kumtor in 2004, after it was spun off from Cameco.

The Kyrgyz government is also a stakeholder in the mine. Relations between Centerra and the former Soviet Republic have been testy at times.

A few years ago, after talks about a new profit sharing plan broke down, Centerra took the dispute to international arbitration.

The two parties settled in 2017, with Centerra agreeing to pay the Kyrgyz government US$50-million and a number of other smaller continuing payments. The Kyrgyz government is Centerra’s biggest shareholder with a roughly 26.4-per-cent stake.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.