JULY 30 2014 (The Conway Bulletin) – Profit at Toronto-based Centerra Gold, owner of Kyrgyzstan’s Kumtor gold mine, fell because of low gold prices, media reported. Kumtor is Centerra Gold’s main asset and the focus of a major row with the Kyrgyz government. Ian Atkinson, Centerra Gold CEO, also said he was confident of a deal with the Kyrgyz government soon.
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(News report from Issue No. 194, published on August 6 2014)
JULY 29 2014 (The Conway Bulletin) – Tajikistan’s national energy company Barqi Tojik has blamed another massive state-run concern, the aluminium smelter TALCO, for part of its growing $300m debt.
Over a third of Barqi Tojik’s debts are owed to a pair of hydroelectric power facilities, which TALCO officially co-owns with Russia and Iran. Other debts are unpaid taxes to the state, salary arrears, and unpaid loans.
In an interview with Asia-Plus, a Barqi Tojik official said TALCO owed the company $50 million in unpaid energy bills. TALCO, which as reported is itself suffering from a major slump in demand for its products, has denied the allegations.
Barqi Tojik and TALCO are two of Tajikistan’s most significant state-owned companies and both appear to be in trouble.
Barqi Tojik’s debts have grown as public sector clients like TALCO (which alone consumes at least a sixth of national energy production) and other major industrial facilities renege on payments. TALCO reportedly haemorrhaged $40m last year and laid off a fifth of its workforce. The company has suffered from low prices for aluminium and alleged corruption within the political elite. Tajikistan’s economy looks increasing fragile.
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(News report from Issue No. 193, published on July 30 2014)
JUNE 13 2014 (The Conway Bulletin) – After a six month delay, Kyrgyzstan approved a business plan for Centerra Gold’s Kumtor mine in the east of the country. The approval narrowly beat a deadline set by Toronto-listed Centerra Gold which had threatened to close the mine for the year. Kumtor is Kyrgyzstan’s single biggest industrial operation.
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(News report from Issue No. 189, published on June 18 2014)
MAY 22 2014 (The Conway Bulletin) – Russian gold mining company Polymetal paid the equivalent of $619m for two gold mines in Kazakhstan belonging to Timur Kulibayev, the son-in-law of Kazakh president Nursultan Nazarbayev, Reuters reported.
Half the fee will be paid in shares in the new gold mine company called Kyzyl Project.
Mr Kulibayev is one of the most influential and high- profile businessmen in Kazakhstan. He has also been touted, by some, as a potential successor for his father- in-law. His main asset is Halyk Bank, one of the biggest banks in Kazakhstan. He owns a majority stake alongside his wife, Dinara Nazarbayeva, Mr Nazarbayev’s second daughter.
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(News report from Issue No. 186, published on May 28 2014)
May 19 2014 (The Conway Bulletin) – Tajik president Emomali Rakhmon held talks in Dushanbe with Wan Zhenhua of Zijin Mining’s Zarafshon copper-gold- silver mining company in Khujand, Tajikistan (May 19).
Reports made the meeting sound rather Soviet. They listed the various social achievements which included finding work for 2,000 people since 2007 and noting that Chinese investment has reached $235m. The mine now produces half Tajikistan’s total gold production.
But the real story is elsewhere.
Typically, gold mining projects can take up to seven years to become profitable, while red tape surrounding license issuance and political unrest in Central Asia can considerably extend timeframes.
State-owned Zijin, China’s largest gold producer, also owns a gold mine in Kyrgyzstan’s Chui province. In Kyrgyzstan, Zijin had to evacuate roughly 250 employees from their operation in Orlovka village, Chui, in 2012 when one of their excavators reportedly killed a local’s horse, triggering an attack on the company’s offices.
Given the reluctance of other foreign investors to mine in Kyrgyzstan and Tajikistan, some believe China’s interest in mining projects is about strategic control of mineral wealth in the two countries, rather than money.
“Chinese companies take on projects that in my mind are not profitable,” Valentin Bogdetski, head of the Kyrgyz Miners Association told the Conway Bulletin.
“Last year, a Chinese firm won a license for an iron ore concession in Zhetim-Too [Naryn province]. But this ore has little market value, so why do they want the license?”
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(News report from Issue No. 185, published on May 21 2014)
MAY 5 2014 (The Conway Bulletin) — The Temirtau steel plant in central Kazakhstan, owned by Luxembourg-based ArcelorMittal, said that it would make 1,000 workers redundant in order to cut costs.
Outside the energy sector, the Temirtau steel plant is one of Kazakhstan’s biggest industrial operations.
It’s been trying to navigate through a difficult period, though. The combination of sanctions on Iran, previously the factory’s biggest client, and the general global economic weakness combined to knock profits and it has steadily laid off workers over the past couple of years.
At the end of last year, reports surfaced that it would look to cut around 2,500 people from its workforce of about 14,500. This now appears to have been watered down.
There hasn’t been an official statement from the company but state-backed TV channel Astana quoted Dmitry Pavlov, head of human resources at the plant, saying that the work force would be cut by only 1,000 people.
Temirtau is a classic Soviet style monogorod. The plant is the heart and soul of the city and, although the job losses appear to be limited, they will still have a large trickle-down impact.
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(News report from Issue No. 183, published on May 7 2014)
MAY 6 2014 (The Conway Bulletin) – Anglo-Asian Mining, Azerbaijan’s only gold producer, signed a deal to sell its copper concentrate to Geneva trade house Industrial Minerals SA. Anglo-Asian Mining, reported to have links with the Azerbaijani elite, produces copper at its Gedabek mine.
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(News report from Issue No. 183, published on May 7 2014)
APRIL 28 2014 (The Conway Bulletin) — Officials from Chinese gold miners flew to Dushanbe to discuss deals with their Tajik counterparts, media reported. China has been boosting its presence in Tajikistan significantly over the past few years. Tajikistan needs expertise to develop its gold deposits.
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(News report from Issue No. 182, published on April 30 2014)
APRIL 22 2014 (The Conway Bulletin) — Anglo Asian, Azerbaijan’s biggest gold producer, increased production by a third in the first three months of 2014, it said. Anglo Asian, which is listed on the London Stock Exchange, also increased its output forecast for the whole of 2014 by 29%.
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(News report from Issue No. 181, published on April 23 2014)
APRIL 9 2014 (The Conway Bulletin) — Security forces in Tajikistan said they had prevented a terrorist attack on TALCO, the aluminium smelter that forms the backbone of Tajikistan’s economy, media reported. According to a Tajik government spokesman, criminals had planned to detonate bombs at the plant.
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(News report from Issue No. 180, published on April 16 2014)
