Category Archives: Uncategorised

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.

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

Kazakh court fines opposition newspaper

ALMATY, JULY 12 2016 (The Conway Bulletin) — In a case that media freedom lobbyists say shows how Kazakhstan is muzzling independent media, a court in Almaty ordered the opposition newspaper Tribuna/ Ashyk Alan to pay 5m tenge ($14,836) in damages to government official Sultanbek Syzdykov after it described him as corrupt for stealing 23m tenge ($68,249) from the budget of the 2011 Asian Games.

Although police launched an investigation into Mr Syzdykov, the court ruled that the newspaper could not describe him as corrupt because he had repaid the amount he had stolen.

Denis Krivosheyev, the Tribuna journalist who wrote the story, said that the verdict was nonsense.

“This government official was convicted of corruption,” he told reporters outside the court. “It is a fact that no one denies.”

Western government and media freedom groups have accused Kazakhstan of cracking down on free speech. Earlier this year, Guzyal Baidalinova, editor of the opposition Nakanune.kz website, was convicted of slander against Kazkommertsbank, Kazakhstan’s largest bank. She was released from prison, also on July 12, although her guilty sentence remains.

The government has cracked down on the media this year, partly as a reaction to a worsening eco- nomic outlook and to increasing unrest in the country.

Yermurat Bapi, a trustee of the journalists’ union in Kazakhstan told The Conway Bulletin that the media environment was worsening.

“This authoritarian system that was developed over 15 to 20 years has become obsolete, it is dying and with its last gasp is trying to preserve and protect itself through bans, persecutions and the courts,” he said.

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

Kyrgyz Election Commission unseats MP

JULY 11 2016 (The Conway Bulletin) — Kyrgyzstan’s Central Election Commission unseated MP Jyrgalbek Samatov after proving he had used fake documents to lodge his candidacy for a parliamentary election in October last year. The government’s election watchdog found that Mr Samatov had not relinquished his double Russian-Kyrgyz citizenship ahead of the election, which made him automatically unelectable. Mr Samatov later said he would sue the Commission.

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

ADB sends loan to upgrade Azerbaijan’s electricity

JULY 15 2016 (The Conway Bulletin) — After lengthy negotiations, the Asian Development Bank (ADB) decided to loan $750m to Azerbaijan, to co-fund improvements to the country’s power distribution sector.

The aim is to connect peripheral regions outside Baku, which suffer from chronic system losses, to the main grid and reduce inefficiency and waste. But with electricity generation falling, Azerbaijan needs to put more attention and effort towards its upstream power sector, rather than the downstream.

It’s true that Azerbaijan is self- sufficient and produces all the electricity it consumes domestically, as the ADB also said.

The worry is rather on the shrinking margin of extra production allocated to exports.

In 2015 electricity exports halved compared to the previous year according to Azerbaijan’s customs agency. Azerbaijan exported 276.8m kWh of electricity in 2015 against 588.3m kWh in 2014.

And the problems continued this year.

In the first half of 2016, electricity generation at Azerlight, the country’s main producer, fell by 6%, compared to the same period last year, to 10.8b kWh. Consumption, on the other hand, continued to grow exponentially at annual rates of 5-9% since 2010.

For quite some time Azerbaijan has said it wants to export more electricity to its neighbours Turkey and Iran, a power export target that seems in vogue across the region currently.

Now this option seems to be falling off the priority list as the government has become increasingly worried that Azerbaijan could soon need external help to fulfil its domestic demand.

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

Azerbaijan and Armenia peace talks closer, says Lavrov

JULY 12 2016 (The Conway Bulletin) — Russia’s foreign minister Sergei Lavrov said that a peace agreement on Nagorno-Karabakh, a region that Armenia-backed forces and Azerbaijan have fought over, could be closer than ever. Mr Lavrov met with Azerbaijan’s President Ilham Aliyev in Baku a week after meeting Armenia’s foreign minister Eduard Nalbandyan. Russia has mediated between the two governments after clashes erupted in April, breaking a 20-year ceasefire.

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

Japanese-Turkish consortium completes chemical factory in Turkmenistan

JULY 8 2016 (The Conway Bulletin) — A Japanese-Turkish consortium said it completed construction at a petrochemical plant in Turkmenistan’s north-eastern Lebap province. Japan’s Mitsui Engineering Shipbuilding, Sojitz Corporation and Turkey’s Renaissance Holding completed the plant, which will have an annual production capacity of 500,000 tonnes of sulphuric acid, used for fertilisers, detergents and synthetic fibres. Most of the plant’s production is earmarked for exports.

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

Kyrgyzstan defends shares in Centerra Gold

BISHKEK, JULY 11 2016 (The Conway Bulletin) — A court in Canada dismissed a notion put forward by three companies and a businessman locked in legal disputes with the Kyrgyz government that would have threatened state-owned Kyrgyzaltyn’s ownership of shares in Toronto-listed Centerra Gold.

The decision is a major victory, after years of wrangling, for Kyrgyzstan which wanted to ringfence a 32.7% stake in Toronto-listed Centerra Gold owned by state gold company Kyrgyzaltyn. It’s also a relief for Centerra Gold, which owns the Kumtor gold mine — Kyrgyzstan’s single largest industrial asset.

The claimants — Canadian miner Stans Energy, Turkish construction companies Sistem and Entes and the Latvian citizen Valeri Belokon — had said that the Canadian court should freeze and seize the stake to enforce other arbitration rulings involving Kyrgyzstan. They said that the shares may be officially owned by Kyrgyzaltyn but that the Kyrgyz state was the beneficial owner.

The judge, Justice Conway, disagreed, though, and ruled that Kyrgyzaltyn and Kyrgyzstan could not be treated as the same entity.

The ruling means that the claimants will have to find other jurisdictions to pursue their legal claims against Kyrgyzstan.

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

Tuleshov paid money to protesters, says Kazakh security committee

JULY 11 2016 (The Conway Bulletin) — Kazakhstan’s National Security Committee said that imprisoned businessman Tokhtar Tuleshov paid around $200 to each of the demonstrators that rallied in several Kazakh cities against proposed amendments to the land code in April and May. The Committee said that Tuleshov, in prison since Jan. 30, had organised the protests in 2015, in an effort to overturn the government.

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

World Bank denies Uzbek forced-labour accusations

JULY 8 2016 (The Conway Bulletin) — The World Bank denied allegations that it was fuelling forced labour in Uzbekistan after local human rights campaigners complained about the indirect consequences of a loan from the World Bank’s financial arm to an Uzbek-Indonesian textile joint venture.

The complaint targets a $40m loan approved in December 2015 by the International Finance Corporation (IFC) to Indorama Kokand Textile (IKT), the Uzbek subsidiary of Indorama TBK, a Jakarta-based textile company.

The IFC said that it gave the loan to IKT because it has verified the company’s labour practices.

“[IKT] can trace its cotton supply to ensure it sources only from areas covered by third-party monitoring against child and forced labor,” IFC spokeswoman Elizabeth Price told Reuters.

IKT also refuted the allegations.

“Indorama Corporation has a strict policy of zero tolerance on use of any form of forced labor,” IKT spokesman Prakash Kejriwal said.

The claimants are three local human rights campaigners and one Uzbek alleged victim of forced labour. They said that this loan would reinforce the system of forced labour in the country.

“The IFC loan to IKT and support to commercial banks in Uzbekistan risks perpetuating the forced labor system,” the claimants said in their statement filed with the IFC.

The loan was issued to finance the expansion of the company’s textile plant in Kokand, east Uzbekistan.

The claim highlights the reputational problems of doing business in Uzbekistan for foreign countries. It will likely direct international attention to the issue of forced labour in the country’s cotton picking industry. Uzpahtasanoateksport, the state owned company responsible for the collection and the sale of cotton, is IKT’s sole supplier.

Since 2009, the United States has banned imports of Uzbek cotton and in 2013 it blocked a shipment of IKT cotton at the port of Los Angeles.

Indorama TBK owns 89.26% of IKT, while Uzbekistan’s Central Bank owns the rest.

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

Briefing: Tajikistan’s Rogun dam project

JULY 15 2016 (The Conway Bulletin) — >>Right. Let’s get started. The Rogun Dam. What is it and what is it all about?

>>For Tajikistan and President Rakhmon, the Rogun dam project is vitally important. If it is ever built, and the plans have been knocking around since the Soviet era, the Rogun dam will be the tallest dam in the world at up to 335 m. It will also double Tajikistan’s power generation capacity. The problem is that the dam has proved highly controversial, domestically and internationally, and is also expensive to build.

>>Hang on. Slow down. This is a lot take on. So, Rogun is massive but why is it controversial?

>>It’s controversial because human rights group have accused the government of forcibly moving thousands of people away from the Vakhsh River valley, the area that will be dammed and flooded. The government has also imposed a Rogun dam tax on people to pay for the project. This has gone down badly with human rights groups. Externally, Uzbekistan, Tajikistan’s neighbour, hates the idea of the Rogun dam. It worries that the dam will divert water from irrigating its cotton fields.

>>How serious are Uzbekistan’s concerns?

>>Central Asia is a fragile region. If Uzbekistan is making threatening noises
towards Tajikistan, people need to take notice. Analysts and diplomats have spoken of water wars in Central Asia. I’m not saying that the Rogun dam is going to trigger a war but it is another pressure point that people need to watch.

>>Got it. So with all these obstacles and problems why is Tajikistan pushing for problems?

>>It’s become Rakhmon’s pet project. He probably has another five or ten years left in office and it really feels like he wants and needs the Rogun dam to be his legacy. It’s also become vitally important for Tajikistan’s electricity generation sector. Electricity is becoming an important export commodity for Tajikistan as it has signed up to be the main power generator for the so-called CASA-1000 project.

>>CASA-1000? What is that?

>>It’s the World Bank-backed project to build a power transmission network from Tajikistan to Pakistan. It will cost around $1.2b, cross Afghanistan and be operational, if it all goes to plan, by 2019. The challenge is both security and power generation.CurrentlyTajikistan, and to a lesser extent Kyrgyzstan, doesn’t have the capacity to generate enough power to meet its CASA- 1000 commitments. That’s where Rogun comes in.

>>And the financing? This seems to be an expensive project just when the region is trying to deal with a financial crisis. Where is the finance coming from?

>>Good question. We’re not entirely clear. We’ve only been told that it is a mix of government funds and private investment. Who the private investors are and what their motives are is unknown.

>>I see. So what next?

>>Well, the Tajik government awarded a $3.9b contract to Italian builder Salini Impregilo to start construction work on the dam. We’re still waiting for work to begin but Salini Impregilo has said it will kick off soon. This has been a stop-start project so actually seeing the diggers go in and the workers start to build the dam is important. If this does happen, it’ll dominate news headlines for years to come.

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