sharing in governance of extractive industries

Tajikistan Minerals - a story of opportunity and geopolitics

Tajikistan, the central Asian state with a past history centred on the Silk Route and, more recently, as a member SSR of the Soviet Union, is a land of great opportunities for Minerals development but also one plagued by geopolitics.

Let's start with the minerals.

The Tajik Government states that:

“Mining and Minerals: Underneath Tajikistan's ever-present mountains lie a wide array of natural resources, many of which have not yet been exploited because of their geographical location or geological depth. For its size, Tajikistan is relatively blessed with silver and gold deposits. Total silver ore deposits are estimated at 60,000 tons and the largest, in Koni Mansur, is around 38,000 tons. There are more than 30 known gold deposits, of which only a few have been prospected. Several potentially important coal deposits have been identified but have not yet been exploited. May of the mineral deposits are suitable for relatively inexpensive open-pit mining, but they are found in mountainous regions where extreme weather conditions prevail and transportation routes are difficult or non-existent. There is some coal extraction at the Yaghnob mine in the Sughd Region, while a number of other coal deposits have not yet been exploited.” Source: Ministry of Foreign Affairs, Republic of Tajikistan; http://mfa.tj/index.php?node=article&id=176

The national government is correct to identify issues of remoteness and poor transport infrastructure in its above analysis. The traditional centres for mining silver, coal and antimony are concentrated in the northern part of Sughd province (oblast) of Tajikistan, the oblast constituting the north of the country and reachable from the capital Dushanbe only by mountain pass over the Zarafshan Mountains, the passes of which frequently close during the winter. Shurab is an important Tajik centre for brown coal mining, and Isfara for antimony mining; both are situated in a northeastern corner of Sughd, remote even from its capital of Khujand. In terms of silver mining, the Bolshoi (Big) Koni Mansur mine (see above) is the big hope for the industry in Tajikistan; the government states that its silver deposits are the second largest in the world, albeit as a result of the quantity (at least 50,000 tonnes) of ore rather than its (low) concentration of silver content.  Bolshoi Koni Mansur is also located in Sughd oblast.

Sughd is located in the Ferghana valley, a long and deep valley which is otherwise the sovereign territory of Uzbekistan (to the west, north and east) and Kyrgyzstan (to the south and east). Soviet era transport (both road and rail) communications were proficient along this valley and north to Tashkent, capital of Uzbekistan, and onwards into Kazakhstan.  Political rivalries, in particular with Uzbekistan, since independence in 1991 have resulted in the isolation of oblasts such as Sughd surrounded as it is by non-Tajik sovereign territories.

The position regarding aluminium is also susceptible to negative impacts of Central Asian rivalry.  The following is a good introduction to the importance of the industrial production (as opposed to mining) of aluminium in Tajikistan:

“During the Soviet era, Tajikistan was famous for its aluminium smelter. The largest enterprise in Tajikistan, the Tursunzoda Aluminium Smelter (TadAZ) is in the south-west of the country. It has an overall capacity of over 520,000 tons a year and accounting for 53 per cent of total exports making it one of the largest in the world. Tajikistan produced 131,900 tons of aluminium and earned $210 million in export revenues. However, this is small compared with 450,000 tons in 1990…Tursunzoda consumes nearly 40 percent of the total power output in the country, employs 12,000 workers and indirectly supports a community of 100,000. It has a capacity of 520,000 tons and accounts for more than 30 per cent of total exports”; source: the Embassy of the Republic of Tajikistan to the Swiss Confederation Permanent Mission of the Republic of Tajikistan to the UN Office in Geneva; http://www.tajikistanmission.ch/all-about-of-tajikistan/mineral-res...

Whilst the above statistics may not be completely up-to-date (see below), they do illustrate how important this industry is to the country. TasAZ is now called The Tajik Aluminium Company (TALCO) and aims to produce 332,500 tonnes of primary aluminium this year (2012), compared to 277,584 tonnes in 2011 ; source: http://www.satrapia.com/news/article/tajik-aluminium-output-falls-116/ Even that total would still be significantly short of the 1990 figure quoted at 450,000 tonnes. One reason for this is the ongoing replacement of old, outdated, equipment with new; e.g. the modernization of TALCO’s electro-baths. Another, though, is not technical but (geo-) political; the replacement of Soviet era cooperation between the Central Asian states with one of intense political rivalry. Tajikistan has three rail lines, one passing through Sughd connecting it west and east to Uzbekistan, and two in the south connecting it, again, to Uzbekistan. The bauxite ore used by TALCO is imported to the country from Uzbekistan, by rail, and this is also the natural export route for the finished, unwrought product. Tursonzoda is right on the Uzbek border and Uzbekistan accuses Tajikistan of polluting the Surkhondaryo oblast which abuts this part of western Tajikistan. In a water-stressed region that includes the “Aral Sea” (now replaced in the main by the Aralkum, or Aral desert) Uzbekistan also accuses Tajikistan of denying its water rights to transboundary waters flowing from its (upstream) neighbour and, in the planning of the vast, new, Rogun dam, planning to do so even more in the future. 

As a result of these, and other, disagreements Uzbekistan has (allegedly, I should qualify this statement with ...) repeatedly held up trade at its border with Tajikistan, not least bauxite imports (the country has no discovered commercial aluminium mines of its own), and has not provided its demographically smaller neighbour with the technical support that was typical of the Soviet era, most strikingly when Tajikistan was itself a province of Uzbekistan.

Can Tajikistan obviate the handicaps of its geography, not least its madly winding external borders which also include enclaves and exclaves aplenty, to maximise benefit from its rich resource endowments, endowments that are also the (benign, in this case) result of that same geography?  In doing so, can it escape the alleged curse of Stalin, who is said to have drawn the boundaries of the Central Asian SSRs precisely in a way that they would each struggle to operate independently of each other and, hence, Moscow? Only time will tell.

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