05/30/2013 01:40 EDT | Updated 07/30/2013 05:12 EDT

Hundreds of protesters in Kyrgyzstan cut power to gold mine run by Centerra Gold

BISHKEK, Kyrgyzstan - About 700 protesters, some on horseback, besieged a gold mine run by a Canadian-based miner Centerra Gold in Kyrgyzstan, demanding its nationalization and more social benefits, officials said Thursday.

As part of the protest that has been going on for several days, the demonstrators cut the road leading to the Kumtor mine operated by Centerra (TSX:CG) earlier this week.

But on Thursday some of the protesters entered a power transformer unit and cut electricity to the mine before dispersing for the night.

The company said the mine has begun an orderly shutdown of its milling facility using power from a backup diesel generator and that mining operations have been suspended other than those to manage ice and waste.

Centerra said it is working with the government and local authorities to find a peaceful resolution of the situation.

"If grid power and road access is not restored in a timely manner, the company expects that there will be a material negative impact on the company's operations, including its gold production and financial results," Centerra said Thursday.

The Kyrgyz Cabinet held an emergency meeting to discuss the situation. Officials said that if the electricity supply isn't quickly restored, it could lead to an emergency shutdown of the mine. It wasn't immediately clear what impact the power cut had on the mine.

Kumtor, which accounts for about 12 per cent of the economy of the impoverished ex-Soviet nation, was at the centre of heated political debate among those seeking its nationalization and officials who believe that would deter much-needed foreign investment.

Kyrgyzstan, a country of five million people on China's mountainous western border, hosts a U.S. air base used to support military operations in nearby Afghanistan.

The country has seen the overthrow of two governments in its short history since gaining independence amid the collapse of the Soviet Union in 1991.

President Askar Akayev was driven out of power in May 2005 after a weeks-long sit-in protest against poverty and corruption. Five years later, several dozen were shot dead by government troops when angry mobs attacked the presidential administration building in unrest that led to President Kurmanbek Bakiyev's ouster.

— With files from The Canadian Press