Tajikistan: Foreign Investors Mine Red Tape for Mineral Wealth | EurasiaNet.org

Posted: October 6, 2012 in Tajikistan

When Charles Hornung lost his finance job in London three years ago, he’d never heard of Tajikistan. Now, the CEO of Silverhill Resources is one of a handful of Western mining magnates who call this impoverished Central Asian country home.

“The prospects here are great,” Hornung said at a Dushanbe café this month. “But so are the hurdles.”

With more than 600 documented mineral deposits, including what’s believed to be one of the biggest silver stores in the world, Tajikistan has been attempting to lure foreign mining investment for almost a decade. And despite poor infrastructure and the ever-present threat of corruption, in recent years Tajikistan’s future looked bright, with four international bidders – including Australia’s BHP Billiton and a consortium led by the Switzerland-based Glencore – vying to develop the country’s immense Kalon Konimansur silver-lead-zinc deposit.

But today, only the Glencore consortium remains in the running for the $3-billion investment, and insiders say even this is uncertain. (A Glencore spokesman refused EurasiaNet.org’s request for comment.)

Bidding is set to close this fall. If the Glencore bid falls through, Konimansur will have to be retendered, said the chairman of Tajikistan’s Geology Directorate, Azim Ibrohim, who also sits on the Konimansur tendering commission. Ibrohim blames internal corporate issues for the mass exodus of foreign investors. “It’s company problems, not Tajik problems,” he said.

But Alastair Ralston-Saul, CEO of London-based Longhorn Mining, blames a rough business environment for frightening off potential foreign investors like BHP Billiton. “These smart executives get off a plane here, think they can have all their meetings in three days, clap their hands and have a deal,” Ralston-Saul said. “But they probably didn’t even get a meeting in three days.”

Ralston-Saul has been mining coal, gold and other precious metals in Tajikistan for the past 17 years. “There was no one else here when we came,” he said. “We’d start a mine in a village that hadn’t had a square meal since perestroika and suddenly there’d be kids with shoes and a market.”

Tajikistan, which has discovered “everything but diamonds, is rich in minerals beyond imagination,” said Ralston-Saul. “This country could be a mecca of riches and success, and make enough to keep all its people happy – but this isn’t happening.”

A year in, Hornung of Silverhill Resources has realized why Tajikistan remains rich in minerals and poor in international investment. “Every month has been a progressive discovery of more difficulties,” he said. “There are all these barriers and we have to continually find creative solutions around them.”

Bureaucracy is the biggest investment barrier, he said. “In all steps of the process you either have to pay people unofficially, or have friends who can pull strings.”


Tajikistan: Foreign Investors Mine Red Tape for Mineral Wealth | EurasiaNet.org.


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