Tag Archives: metals and mining

Tajikistan’s TALCO told to cut production

SEPT. 27 2016 (The Conway Bulletin) – TALCO, Tajikistan’s aluminium smelter and the country’s biggest industrial asset, should cut output to survive because aluminium prices have fallen below production costs, the company auditors said.

Tajikistan’s government has repeatedly intervened to give TALCO incentives and preferential loans but has not been able to prevent thousands of job losses.

Now production cuts are likely.

“This year, a significant decrease in the level of world prices for aluminium has impacted TALCO’s earnings. The company auditors have suggested that the management orders a cut in production in order to keep financial losses at a minimum,” TALCO said in a statement.

TALCO produced over 73,000 tonnes of aluminium in the first half of 2016, a 13.5% increase compared to the same period last year. It exports to clients in Turkey, Taiwan, Iran, British Virgin Islands, Uzbekistan and Pakistan.

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. In April, it laid off around 600 workers to cut costs.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

Stock market: Central Asia Metals

SEPT. 30 2016 (The Conway Bulletin) – Kazakhstan-focused copper producer Central Asia Metals continued to gain this week, rallying on its positive half-year report it published in mid-September.

Its stock price in London was up 1.3% to 182.3 on Thursday compared to last week. It has averaged a growth of 1.2% over the past three weeks.

In its half-year report, published on Sept. 13, the company said it increased copper production by 27% to 6,908 tonnes, which helped its revenues to grow marginally to $30.9m despite a sharp fall in copper prices, which have fallen by 17.5% compared to last year.

Importantly too, the company managed to cut production costs by 40%.

“[H1 2016 was] another record period of copper production, resulting in a continued strong financial performance for the Group. The devaluation of the local currency has been a key factor in our reduced costs of production,” Nick Clarke, Central Asia Metals’ executive chairman said in a note.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

Kyrgyz miner names new non-executive chairman

SEPT. 20 2016 (The Conway Bulletin) – Martin Andersson, Chaarat Gold’s largest shareholder, became non-executive chairman of the British Virgin Island-registered mining company developing gold projects in Kyrgyzstan. Mr Andersson is the owner of Labro Investments, which holds a 25.2% stake in Chaarat.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)

Kyrgyzstan to challenge Centerra share issue

BISHKEK, JULY 26 2016 (The Conway Bulletin) — The board of Kyrgyz miner Kyrgyzaltyn will dispute Centerra Gold’s issue of new shares to buy US-based Thompson Creek because it reduces its own overall stake in the company, which owns its biggest gold mine – Kumtor.

This month, the Canadian miner, 32% owned by Kyrgyzaltyn, said that it would buy Thompson Creek for the equivalent of $1.1b, in cash and new shares.

Kyrgyzaltyn had already said it disagreed with the transaction and that it voted against it during the Centerra board meeting.

As part of the financing for the acquisition of Thompson Creek, Centerra Gold issued new shares which analysts said will reduce Kyrgyzaltyn’s 32% stake in Centerra to approximately 28.8%.

Now the local language service of US-funded Radio Free Europe/Radio Liberty has reported that senior Kyrgyz government officials are considering how to dispute the move, setting the scene for more disagreements between the Toronto-based company and Kyrgyzstan.

The two have been locked in a protracted row for years.

Kyrgyzsan wants to increase its direct ownership of the Kumtor mine, the country’s largest economic asset.

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(News report from Issue No. 291, published on Aug. 1 2016)

Kazakh miner’s production grows

JULY 22-28 1 2016 (The Conway Bulletin) — Kazakhstan miner KAZ Minerals posted a 43% growth in output in H1 2016, compared to the same period last year, to 52,600 tonnes of copper cathode. KAZ Minerals also said it cut costs for the development of its Aktogay project by 4.4% to $2.2b. Together with Bozshakol in northern Kazakhstan, the Aktogay project, located in eastern Kazakhstan, is KAZ Mineral’s main copper asset.

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(News report from Issue No. 291, published on Aug. 1 2016)

China pursues Tajik gold

JULY 22 2016 (The Conway Bulletin) — Chinese power engineering company TBEA received a licence to develop the Eastern Duoba and Upper Kumarg gold mines. The company, which won a tender to build a thermal power plant in Dushanbe in 2014, completed exploration works at the two mines in June. Chinese investment in Tajikistan has grown significantly in the past decade.

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(News report from Issue No. 291, published on Aug. 1 2016)

Business comment: Centerra’s Good, Bad, and Ugly

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.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Kyrgyzstan-operated Centerra finalises investments

JULY 20 2016 (The Conway Bulletin) — Canadian miner Centerra Gold said it finalised a financing deal with three investment banks to partially fund its takeover of Thompson Creek, a US-based miner. Centerra will receive 185m Canadian dollars ($142) from BMO Capital Markets, Credit Suisse Securities Canada and Scotiabank. Centerra Gold’s main asset is the Kumtor gold mine in Kyrgyzstan.

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(News report from Issue No. 290, published on July 22 2016)

Azerbaijani miner’s production shrinks by 5.9%

JULY 14 2016 (The Conway Bulletin) — Azerbaijani miner Anglo Asian said production shrank by 5.9% to 33,837 ounces in the first half of 2016, compared to the same period last year. The company, listed in London, said it will keep its production target at 73,000/77,000 ounces for 2016 as it expects a boost in the second half.

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(News report from Issue No. 289, published on July 15 2016)

Stock market: Anglo Asian Mining

JULY 14 2016 (The Conway Bulletin) — Helped by the Brexit impact, shares in Azerbaijan’s Anglo Asian Mining soared at the end of June. A positive outlook has now sent them up again. Its shares closed at 19.5p on Thursday, up 5.4% in one week.

At the end of June, Anglo Asian said it would sell the remainder of its 2016 production as futures, which gave a bullish message to investors, as the company tried to raise cash to pay out some of its debt.

Despite posting a production cut in H1 2016, the company was upbeat because the second quarter outperformed the first.

“The second half of the year has historically been our best performing half due to the seasonally better weather and our production will also benefit from the second SAG mill which is due to start operating next month,” CEO Reza Vaziri said in a statement.

Overall it was a positive week for most Central Asia and South Caucasus-linked stocks, lifted by increased stability in oil and gold prices.

ENDS

(News report from Issue No. 289, published on July 15 2016)