China’s new gold project is a double-edged sword for Tajikistan

The President of Tajikistan visited the northern region of Sughd on April 14 to oversee the opening of a new gold processing plant built by a Chinese investor at a cost of approximately $136 million.

The company, Talco Gold, will produce up to 2.2 tonnes of gold and 21,000 tonnes of antimony per year, according to government officials.

China is by far Tajikistan’s main source of supply. foreign direct investment. In 2021, Chinese companies invested more than $211 million in Tajikistan, an amount that represents nearly 62% of the global FDI figure. These funds mainly went to the mining and processing of lead, zinc and tin ores, as well as the mining of precious and semi-precious stones and metals.

Talco Gold is a joint venture between Talco Aluminum Company, a Tursunzoda-based company believed to be owned by Hasan Asadullozoda, President Emomali Rahmon’s brother-in-law, and China’s Tibet Huayu Mining.

The company promised to provide jobs for 1,500 people, mostly Tajik nationals. This prospect comes at a fortuitous time, just as Tajikistan faces the prospect of a new economic crisis precipitated by international sanctions against Russia, where hundreds of thousands of Tajiks travel each year for seasonal work.

Construction work on the processing facility in the Sughd area, which will operate with materials mined from nearby Chulboi, Konchoch and Shakhkon deposits, began four years ago but was delayed by the onset of the pandemic. of COVID-19.

Talco is ostensibly an aluminum company, but it began to diversify in 2015 following a state-designed program to support the business. Under this program, the government handed over the company a 25-year concession over the Konchoch gold and silver deposits.

Chinese investments invariably come with many strings attached, not least because Tajikistan is deeply indebted to Beijing. According to the Ministry of Finance, Tajik debt to China as of January 1 was $1.1 billionwhich accounts for almost exactly one third of the country’s overall external debt.

Some economic experts doubt that China’s debt strategy for Tajikistan brings sufficient rewards.

“China grants money in the form of a loan to Tajikistan for specific projects, and often the parliament approves tax exemptions during the construction period,” an analyst told Eurasianet on condition of anonymity, as critics of the government may result in retaliation. “Construction equipment is imported from China, Chinese workers are engaged in the construction. As a result, all the money is going back to China, and Tajikistan is still struggling with debt.

By Eurasianet.com

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