Kyrgyz police move in on Centerra gold mine protesters

There have been angry clashes in Kyrgyzstan after hundreds of police moved in to disperse a protest over a valuable Canadian-owned gold mine.

About 1,000 people have been camped out for days calling for a bigger share of the profits from the Kumtor mine, owned by Canada's Centerra Gold group.

The government has now declared a state of emergency around the gold mine.

The mining group says it has paid $1bn (£660m) in taxes since it was formed and spends millions on social projects.

The government and Kumtor Gold, a subsidiary of Centerra Gold, have warned that output could be affected if the situation is not resolved. In a statement, the government also promised to work towards a bigger share of revenue for the country.

"We have a contract in place which clearly states the economic conditions set out regarding the mine, as to the taxes that we pay," John Pearson, Vice President of Investor Relations at Centerra Gold told the BBC.

"Are there other areas where we can work with the Kyrgyz government? I'm sure there are, and we will come to an acceptable solution," Mr Pearson added.

A BBC Kyrgyz correspondent at the scene says there have been injuries on both sides and more than 1,000 people have blocked the main road to Bishkek, with many demanding to see the president or prime minister.

Police reportedly fired tear gas at the protesters, who pelted special forces with stones.

Reports that protesters had seized government buildings in the south-western city of Jalalabad were denied by local police.

A criminal case has also been opened against those who damaged the power supply, under a new law criminalising the occupation of government buildings and enterprises. Protesters had seized an electricity station in an effort to cut power to the mine.

Protests quietened down as evening broke with only a few people remaining, apparently guarding the site from where power to the mine was interrupted again.

Biggest tax-payer

At 4,000m (1,300ft) above sea leve, Kumtor, in the country's Issy-kuil region, is one of the highest gold mines in the world, situated in the permafrost of the Tien Shan mountains of China and Central Asia.

Its economic importance for one of the region's poorest countries is enormous, with the mine accounting for 12% of Kyrgyzstan's GDP and more than half of all its exports in 2011.

But a state commission, which was formed to re-assess the mining deal struck with Centerra Gold in 2009, says the company is paying too little.

Some protesters have also called for the mine to be nationalised outright.

In Kumtor Gold's response to the grievances aired, it added that despite being the largest tax-payer in the country and funding many projects, it could not be expected to solve all of Kyrgyzstan's problems.

But analysts say that the current stand-off is the latest in a series of disputes which have piled pressure on parent company Centerra Gold and the Kyrgyz government, worried it might deter foreign investors.

"Over the past year Kumtor has certainly been used as a political vehicle," Mr Pearson said.

"Since we are the largest business enterprise and the largest tax payer in Kyrgyzstan, we do become an easy target for various individuals or groups to use us as a political football so to speak," he added.