British Firm Pulls Out of Tajik Gold Mine
British Firm Pulls Out of Tajik Gold Mine
A British mining company with a 75 per cent share in Tajikistan’s largest gold mining venture is being bought out by a Chinese firm in the face of mounting extraction costs, say NBCentralAsia experts.
Last week, Hong Kong gold mining company ZiJin Mining Group announced its intention to buy Commonwealth & British Mineral Ltd, a subsidiary of the British company Avocet Mining Plc, according to the Avesta news agency.
Commonwealth & British Mineral Ltd has a 75 per cent share in the Zeravshan Joint Venture, Tajikistan’s largest gold-mining enterprise.
According to unofficial reports, the deal is worth 55 million US dollars and will be completed by the end of July. The Chinese company is also planning to invest an extra 100 million dollars to develop the enterprise.
The Zeravshan company has operating since 1996 and extracts about 70 per cent of the 1,800 kilograms of gold extracted in Tajikistan every year.
Deputy economy minister Mahmadsharif Haqdodov told NBCentralAsia that the British company had incurred significant losses. Zeravshan has been unprofitable for several years because of the low world market price of gold. Despite a recent resurgence, the British company decided to sell at the beginning of the year, said Haqdodov.
The world price of gold has risen from 435 dollars per ounce in 2005 to 650-670 dollars this year.
A geology expert in Tajikistan who asked to remain anonymous said the UK firm may have decided to leave because the upper soil strata had been mined of most of their gold. Lower strata might contain more arsenic – commonly associated with gold deposits – which would require costly specialised technology to remove.
The geologist notes that ZiJin Mining Group is ready to bring in the technology needed to remove extraneous elements from the gold ore, but warns that this could pose environmental risks. But he said the Chinese investor is likely to manage these risks safely.
Tajikistan currently has over 400 known deposits of gold, silver, antimony, coal, iron, lead and precious stones. Almost all of the mining enterprises operating in the country are privately owned and are funded by foreign capital.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
Last week, Hong Kong gold mining company ZiJin Mining Group announced its intention to buy Commonwealth & British Mineral Ltd, a subsidiary of the British company Avocet Mining Plc, according to the Avesta news agency.
Commonwealth & British Mineral Ltd has a 75 per cent share in the Zeravshan Joint Venture, Tajikistan’s largest gold-mining enterprise.
According to unofficial reports, the deal is worth 55 million US dollars and will be completed by the end of July. The Chinese company is also planning to invest an extra 100 million dollars to develop the enterprise.
The Zeravshan company has operating since 1996 and extracts about 70 per cent of the 1,800 kilograms of gold extracted in Tajikistan every year.
Deputy economy minister Mahmadsharif Haqdodov told NBCentralAsia that the British company had incurred significant losses. Zeravshan has been unprofitable for several years because of the low world market price of gold. Despite a recent resurgence, the British company decided to sell at the beginning of the year, said Haqdodov.
The world price of gold has risen from 435 dollars per ounce in 2005 to 650-670 dollars this year.
A geology expert in Tajikistan who asked to remain anonymous said the UK firm may have decided to leave because the upper soil strata had been mined of most of their gold. Lower strata might contain more arsenic – commonly associated with gold deposits – which would require costly specialised technology to remove.
The geologist notes that ZiJin Mining Group is ready to bring in the technology needed to remove extraneous elements from the gold ore, but warns that this could pose environmental risks. But he said the Chinese investor is likely to manage these risks safely.
Tajikistan currently has over 400 known deposits of gold, silver, antimony, coal, iron, lead and precious stones. Almost all of the mining enterprises operating in the country are privately owned and are funded by foreign capital.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
