JULY 26 1 2016 (The Conway Bulletin) — Negotiations for a $500m IMF loan are continuing, Jamoliddin Nuraliyev, deputy chief of Tajikistan’s Central Bank told local media. The IMF has scheduled a visit to the country in August to lay out details for the loan. Mr Nuraliyev said that the country needs support to see it through a “difficult economic period.”
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(News report from Issue No. 291, published on Aug. 1 2016)
JULY 26 2016 (The Conway Bulletin) — Maintenance work at the Bukhara-Tashkent-Bishkek-Almaty gas pipeline will result in gas cutoffs in several Kyrgyz towns, the press service of Gazprom Kyrgyzstan said. The pipeline is part of a Soviet-designed system pumping Uzbek gas to Kyrgyzstan and Kazakhstan and the repairs and gas cutoffs show just how antiquated the pipeline network has become.
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(News report from Issue No. 291, published on Aug. 1 2016)
AUG 1 2016 (The Conway Bulletin) — This month, Canadian miner Centerra Gold received permission from the Kyrgyz government to continue its operations at the Kumtor gold mine in the east of the country, increased its production guidance and said it will pay out dividends for the second quarter of the year.
Kyrgyzaltyn, which owns 32% in Centerra, will receive $2.3m in dividends.
This will be the first time Kyrgyzaltyn has received a dividend from Centerra since 2014, when a Canadian court froze its assets due to a pending court case. Last week, the Canadian court dismissed the case and this week it released Kyrgyzaltyn’s assets.
By only reading official press releases, the month of July must have been excellent for Centerra and Kyrgyzaltyn.
But there’s more, and it looks ugly in the medium term.
Centerra raised cash through loans and new shares to buy a majority stake in Thompson Creek a US-based miner focused on Canadian gold. The whole operation will be worth $1.1b.
But issuing new shares will anger Kyrgyzaltyn, which will see its stake in the company shrink to around 28.8%. This means less direct revenues from the Kumtor gold mine, which is 100% owned by Centerra. Essentially, the Kyrgyz government wants to bring the gold mine back under its control.
If relations between the Candian miner and the Kyrgyz government do worsen, the fate of the Kumtor gold mine, Kyrgyzstan’s largest mining asset, could become more uncertain than ever.
For both Kyrgyzstan’s economic outlook and also for its reputation as a place to do business, this is not good.
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(News report from Issue No. 291, published on Aug. 1 2016)
JULY 28 2016 (The Conway Bulletin) — Turkish company DAL Teknik Makina completed the expansion of one of the largest Uzbek cement complexes, the ministry of economy said in a statement. State- owned Almalyk Mining-Metallurgical Complex commissioned the expansion of the cement plant in the Jizzakh region near Samarkand, southern Uzbekistan, for $35.8m. The plant should now increase production of cement to 650,000 tonnes in 2016 and to around 1m tonnes thereafter. Last year, China’s Shanfang Cement pledged a $130m investment to build a new cement plant in Uzbekistan.
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(News report from Issue No. 291, published on Aug. 1 2016)
JULY 28 2016 (The Conway Bulletin) — Azerbaijan’s energy minister Natig Aliyev said that his country is ready to link its energy system with Russia and Iran and create a north-south energy corridor. Once complete, the corridor would allow Iran to import around 700 megawatt of electricity per year. Iran currently imports electricity from Armenia. At the end of June, Iran and Azerbaijan completed a cross-border power transmission line.
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(News report from Issue No. 291, published on Aug. 1 2016)
JULY 23 2016 (The Conway Bulletin) — China will go ahead with the construction of a fourth line of the Central Asia-China gas pipeline from Turkmenistan through Uzbekistan, Tajikistan and Kyrgyzstan, officials said. Luo Wei Dong, a deputy at China’s ministry of commerce told the Kremlin- funded Sputnik news agency that the pipeline will be built in the near future and will increase the overall capacity by 54% to 85b cubic metres/year.
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(News report from Issue No. 291, published on Aug. 1 2016)
TBILISI, JULY 27 2016 (The Conway Bulletin) — Georgia’s wine marketing chiefs are looking to reduce their export over-dependence on Russia and boost sales to China.
Having cemented its status and influence in Central Asia over the past decade, China has pushed harder for a stronger foothold in the South Caucasus. In the last few years it has opened up cultural centres, sent senior officials on trade and diplomatic visits and given out soft loans.
Now China also appears to be sponsoring an education and advertising drive to encourage consumers to buy products from the region, including that most iconic of Georgian products — wine.
In an interview with The Conway Bulletin, Irakli Cholobargia, the head of marketing at the Georgian National Wine Agency, said that China had built shops dedicated to selling Georgian wine.
“Wine consumption in China is growing and Georgian wine is an extremely attractive product on Chinese market because of its ancient origins and old traditions,” he said.
“There are businessmen who started to open big wine houses wholly dedicated to Georgian wines. This is a completely different approach to the wine business. Nowhere else is there this kind of approach.”
And the figures back up this trend. China has now become Georgia’s third biggest export market after a 148% increase in sales during the first half of the year.
Georgia is likely to sign a free trade agreement with China later this year, again boosting trade between the two countries.
All this, Mr Cholobargia said, was helping his strategy of reducing the Georgian wine industry’s reliance on Russia. Russia stopped a number of products being imported from Georgia in 2006, including wine, when relations between the two countries fell apart, leading to a brief war in 2008. In 2013, the trade embargo was relaxed.
“The Russian market is not a stable market. Before the embargo in 2006, 80% of our export went to Russia,” Mr Cholobargia. “When it opened up in 2013, we had 65% of total export to Russia. Now it is about 50%. Our goal is to keep shrinking this, and maybe get to the 30%.”
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(News report from Issue No. 291, published on Aug. 1 2016)
JULY 21 2016 (The Conway Bulletin) — Tajikistan’s state-owned aluminium smelter TALCO said it produced 73,100 tonnes of aluminium in H1 2016, a 13% increase over the same period last year. Low commodity prices, though, meant it sold aluminium at a price range of $1,400-$1,600/tonne. Production costs have reached $2,000/tonne.
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(News report from Issue No. 290, published on July 22 2016)
JULY 19 2016 (The Conway Bulletin) — Tajikistan’s customs agency said that the country imported around 1,300 cars in H1 2016, a drop of 80% compared to the same period last year. Earlier reports said that car imports in Kyrgyzstan have also dropped in H1 2016. Tajikistan and Kyrgyzstan are two of the most remittance-dependent countries in the world and their economies have been hit hard by a recession in Russia.
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(News report from Issue No. 290, published on July 22 2016)
JULY 15 2016 (The Conway Bulletin) — Azerbaijan’s state-owned energy company SOCAR said that it had resumed operations at an oil platform badly damaged by a storm and a fire in December. SOCAR said that work at one of the 28 oil wells operated by Platform No. 10 in the shallow-water Guneshli field had restarted. 31 oil workers died in the storm on Dec. 11, the worst offshore accident at an oil platform for nearly 30 years.
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(News report from Issue No. 290, published on July 22 2016)
