A GRAVEL road winds up in snowy switchbacks, past the tree line, to a model of efficiency rare in this impoverished Central Asian nation. At the gate, 4km (13,000 feet) above sea level, busloads of workers have their bags X-rayed for booze coming in or nuggets going out. Since 1997 they have pulled about 270 tonnes of gold from an open pit in the Tian Shan mountains near the Chinese border. In a good year the Kumtor mine accounts for 12% of Kyrgyzstan’s GDP and half of its exports, while contributing nearly a tenth of the national budget.

Yet getting gold out of Kumtor is a pain, and not because of the high remoteness. Rather, Kyrgyzstan’s troubled politics holds back Kumtor and helps explain why foreign-run mines are so rare in a country brimming with gold and many other mineral deposits. For the third time in ten years, authorities in Bishkek, the capital, are pushing to renegotiate terms with Centerra Gold, the Canadian company operating Kumtor (Kyrgyzstan currently has a minority stake in the company). In January a state commission claimed to have found every imaginable problem: excessively low tax rates, corruption and environmental damage. It has since slapped the company with almost $500m in fines. Last month parliament voted to scrap the existing agreement over Kumtor, signed in 2009. In the past year Centerra’s share price has slid by two-thirds. Some politicians like to threaten nationalisation. The economy minister, Temir Sariev, says the current agreement has to be jettisoned because it was signed during the corrupt rule of the then-president, Kurmanbek Bakiyev, a venal despot ousted in a bloody uprising the following year. That Mr Bakiyev bilked the country is not in doubt. Yet corruption still flourishes at all levels of government. Kyrgyzstan ranks 154th out of 176 in Transparency International’s latest corruption-perceptions index. Although the post-Bakiyev government has signalled that it wishes to clean up, it has a long way to go. In February, for example, the Supreme Court voted to keep secret the salaries of MPs. International prospectors and ordinary Kyrgyzstanis broadly agree that Centerra got too sweet a deal in 2009. The company pays 14% of its gross revenues as taxes, plus a small annual environmental fee. The government wants something closer to 20%. Yet its negotiating tactics—emotionally charged and highly public—are frightening off investors.

Centerra says it is looking for a solution, and is prepared to seek international arbitration. The company argues that it signed a legitimate agreement in 2009 and that, since then, it has poured $1.2 billion into the mine, extending its life to 2026.

The state commission’s environmental claims do not appear to muster confidence. Mr Sariev says Kumtor wreaks “colossal damage” upon the environment. Yet two foreign audits he commissioned found no evidence of Centerra breaking Kyrgyz law.

The accusations gain credence, however, because of negative perceptions of Kumtor’s environmental record. In 1998 a lorryload of cyanide spilled into a river near the mine. Now, residents of Barskoon, a village about an hour’s drive down from the mine, are divided. The mine employs 2,600 Kyrgyzstanis, mostly from their neighbourhood. Salaries start at $1,500 a month, more than seven times the national average.

Yet most villagers see no benefits. A development fund set aside for the region is poorly managed and cannot shake off allegations of corruption. Residents sometimes block the only access road, demanding jobs and complaining that Kumtor has caused headaches and heart attacks—and even the rotting teeth of a chain-smoking attendant at the local petrol station.

Parliament has given the government and Centerra three months to come to a new deal. “It’s fraud,” says Michael Fischer, Kumtor’s boss, of the state commission’s claims. “They should be spending their time trying to find another Kumtor rather than shaking down the one they’ve got.”