Centerra Gold official says Mongolia

by Mongolia Web News

Officials of Centerra Gold, Inc. said Friday that Mongolian tax laws are delaying construction of its second gold mine.

``What those lawmakers here are doing in the parliament is not helping the mining industry to be developed here in the country,'' Igor Kovarsky, Centerra’s vice president of government affairs and corporate development, told Bloomberg Financial News in Ulaanbaatur.

Company officials said they are unable to proceed on developing the Gatsuurt gold mine due to its inability to negotiate a tax agreement with the government. Currently, a windfall tax provides 68 percent of profits on gold sales above $500 an ounce to Mongolia, Kovarsky said.

Centerra is also operator of the mammoth Boroo gold mine.

``A windfall profit tax kills any project, especially a project the size of Gatsuurt, it is not a big deposit,'' Kovarsky said. ``It is a big problem.''