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?”
ENDS
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(News report from Issue No. 185, published on May 21 2014)