Tag Archives: business

Tajik-Chinese JV produces first gold at mine in Tajikistan

DUSHANBE, JUNE 6 2016 (The Conway Bulletin) — A Chinese-owned mine has produced its first gold in Tajikistan, highlighting the growing influence and importance of China in the Tajik precious metals sector.

Another Chinese gold mining company, though, was accused of trying to dodge paying an environmental fine, a reminder of the complexity of business in the region.

Tajikistan’s government said Pokrud LLC, a Chinese-Tajik JV involving the China National Metallurgical and Mining Company mine, had held a licence to develop a mine 20km east of Dushanbe since 2003. Only far more recently, though, has work started on exploiting it.

Official news outlets quoted the visiting President Emomali Rakhmon as saying that investments to date in the mine totalled $256m. The Pokrud mine will produce around 1.3 tonnes of gold per year, giving the gold sector in Tajikistan a decent boost. It currently produces around 4 tonnes of gold per year.

At the other end of the spectrum, Chinese miner Zijin Mining, which operates the Zarafshan mine in the north of the country, was at the centre of a corruption probe this week.

Tajikistan’s anti-corruption agency, headed by Mr Rakhmon’s son, Rustam Emomali, said the company had finally paid off a 13.4m somoni ($1.7m) penalty for environmental damage owed since last year. He said that two of Zijin Mining’s managers had tried to dodge the payment by allegedly forging official documents. The two managers are now under investigation.

Zijin Mining bought a 75% stake in Zarafshan from Britain’s Common- wealth and British Minerals in 2007. Zarafshan is Tajikistan’s biggest gold mine.

The majority of the largest gold mining projects in Tajikistan are part- owned by Chinese companies. Tajikistan is looking to gold production, with Chinese help, and electricity exports to boost its GDP.

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(News report from Issue No. 284, published on June 10 2016)

China to invest in Georgian healthcare

JUNE 3 2016 (The Conway Bulletin) — The Chinese government said it will inject a $9m investment into the Georgian healthcare system, which will improve medical infrastructure in two peripheral regions. China’s vice-PM Zhang Gaoli said the investment is part of the country’s Silk Road strategy. In 2014, the Chinese government invested $4m in a similar programme.

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(News report from Issue No. 284, published on June 10 2016)

Expobank buys Kazakh RBS

JUNE 8 2016 (The Conway Bulletin) — Russian lender Expobank, owned by Igor Kim, agreed to buy the Kazakhstan-based subsidiary of Britain’s Royal Bank of Scotland. Earlier this year, Mr Kim bought RBS’s Russian subsidiary. Orifzhan Shadiyev, owner of Capital Bank Kazakhstan, had, in March 2015, expressed an interest in buying RBS Kazakhstan although the deal later fell through.

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(News report from Issue No. 284, published on June 10 2016)

Tourism income rises in Georgia

JUNE 8 2016 (The Conway Bulletin) — PM Giorgi Kvirikashvili said income earned from the tourist industry reached $1.94b last year, 8.3% more than in 2014. According to Mr Kvirikashvili, the number of incoming tourists increased by 14% in the first five months of the year, compared to 2015. This is important for Georgia, where tourism is a major part of its economy.

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(News report from Issue No. 284, published on June 10 2016)

Business comment: Banking mergers

JUNE 10 2016 (The Conway Bulletin) — A wave of mergers, acquisitions and privatisations has hit Central Asia and the South Caucasus.

At The Bulletin, we’ve extensively covered the Kazkommertsbank buyout over the past two years. But elsewhere, from Azerbaijan to Uzbekistan, the banking sector is in a restructuring phase.

A renovation of the financial sector had become crucial after an extended economic downturn hit the money markets, from currency exchange rates to loan sustainability. What’s more, low oil prices, besides depressing budget capacity and economic growth, have hindered investment and project financing.

From small local lenders to country-wide behemoths, banks across Central Asia and the South Caucasus have equally suffered, albeit for different reasons.

And since the beginning of 2016, small quakes have shaken the sector.

In Azerbaijan, immediately after the sharp depreciation of the manat, middle and small-sized banks were unable to maintain the newly set capital ratio requirements, triggering failures and mergers.

This week a rather obscure deal involving an Uzbek bank and a German plastics manufacturer marked the beginning of the new privatisation era in Uzbekistan.

And of course, across the border in Tajikistan, we are now three weeks into the care-taking administration of the country’s second-largest bank.

This is both a stress test and an opportunity. 25-year-old countries cannot afford to have a banking crisis every decade. Dependent as they are on commodity prices and regional trade, they need to seize this occasion to build more reliable and stable foundations for their finance sector.

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(News report from Issue No. 284, published on June 10 2016)

Stock market: Central Asia Metals share price prospects

JUNE 10 2016 (The Conway Bulletin) — Analysts in London are positive about copper producer Central Asia Metals, despite its shares hitting 144.5p, the lowest level in four months, on Thursday. It had traded at a high of around 170p.

Canaccord Genuity set a price target of 190p, in line with the majority of analysts who rate it a “buy”.

Central Asia Metals is a Kazakhstan-based copper producer, which had recently seen its share price rise after announcing positive results for 2015 and saying that its ambitious expansion was on schedule. Kenes Rakishev, a powerful Kazakh businessman and son-in-law of defence minister Imangali Tasmagambetov, is Central Asia Metals’ largest shareholder with 19%.

Other shareholders own 10% or less in the company. Mr Rakishev has actively diversified his investment portfolio in recent years buying Kazakhstan’s largest bank, Kazkommertsbank, and acquiring a minority stake in a discount retail chain.

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(News report from Issue No. 284, published on June 10 2016)

Power production sinks in Azerbaijan

JUNE 6 2016 (The Conway Bulletin) — Electricity production in Azerbaijan shrank by 6.1% to 9.2b kWh last year, state-owned Azerenergy said in a statement. Power generation had decreased marginally in 2015 compared to the previous year. Electricity generation, especially from sources other than coal or gas, is one of the main priorities for Azerbaijan.

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(News report from Issue No. 284, published on June 10 2016)

Donald Trump in hot water over Azerbaijani deal

JUNE 4 2016 (The Conway Bulletin) — Donald Trump, the presumptive Republican party candidate for a presidential election later this year, has quietly ditched a real estate project in Azerbaijan that had been linked to an father-son combination allegedly connected to the Iranian military, the AP news agency reported.

Mr Trump had made the initial deal in Baku in 2013 with Anar Mammadov. His father Ziya Mammadov is a government minister and is also alleged to be linked to various money laundering schemes as well as to the Iranian military. Although some sanctions were lifted on Iran earlier in the year, it is still an offence to do business with the Iranian Republican Guard.

Mr Trump has not commented on the case although his staff have said that the project had been delayed because of economic conditions.

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(News report from Issue No. 284, published on June 10 2016)

Armenia launches smartphone

JUNE 6 2016 (The Conway Bulletin) — Under the slogan “It’s time for Armenian products”, a mobile phone designed and built in Armenia by a US-Armenian joint venture went on sale in Yerevan.

The ArmPhone smartphone retails at between $100 and $300. It also, importantly, goes some way to boosting Armenia’s ambitions of becoming a genuine tech hub in the South Caucasus.

This is the second device that the JV, Technology and Science Dynamics Inc, has unveiled. In February 2014, it launched the ArmTab tablet.

Vahan Shakaryan, chairman of Technology and Science Dynamics Inc, said the company would sell the ArmPhone across the FSU and establish a shop in Moscow.

“It is important to note that our product is high quality and we stand behind and take responsibility for the quality of our product,” media quoted him as saying. “We produce in Armenia, we are with our con- sumers and take full responsibility for every step, from production to customer service.”

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(News report from Issue No. 284, published on June 10 2016)

Telia to sell subsidiaries in Azerbaijan, Georgia, Uzbekistan

JUNE 6 2016 (The Conway Bulletin) — Investigations into corruption allegations at its subsidiaries in Central Asia has slowed a sale by Swedish telecoms operator Telia Company, formerly TeliaSonera, of its 59% stake in Netherlands-based holding company Fintur to Istanbul-based Turkcell, sources involved in the sale told Bloomberg News. Fintur is valued at $1b and owns telecoms subsidiaries in Kazakhstan, Azerbaijan, Georgia, Tajikistan, and Moldova.

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(News report from Issue No. 284, published on June 10 2016)