June 22, 2011 / 12:49 PM / 8 years ago

BHP, Kazzinc to vie for Tajik silver deposit

* Konimansuri Kalon licence to be awarded by year-end

* Chinese companies withdraw from race - govt official * IFC-backed silver project could boost Tajik economy

By Olga Orininskaya ALMATY, June 22 (Reuters) - BHP Billiton (BHP.AX) BLT.L and a consortium led by Glencore-owned (GLEN.L) Kazzinc are the only contenders for Tajikistan’s largest silver field after three Chinese rivals withdrew their bids, a government official said.

The licence to develop the Konimansuri Kalon deposit should be awarded by the end of this year, Rahmonbek Bakhtdavlatov, first deputy head of Tajikistan’s government agency for geology, told reporters on Wednesday.

The International Finance Corporation, the investment arm of the World Bank, is the lead adviser for the deal that Tajikistan hopes will bring investment of about $2 billion to an economy dependent largely on remittances from migrant workers.

“If we work this project out, the investment climate in Tajikistan will change completely,” Bakhtdavlatov said on the sidelines of a mining conference. “We should resolve the issue this year.”

Tajikistan, a mountainous republic bordering Afghanistan and China, is the poorest of the 15 former Soviet states. More than 47 percent of its 7.5 million people live on less than $2 a day, according to World Bank data.

Approximately 1 million migrant workers sent home $2.2 billion last year, or nearly 40 percent of Tajikistan’s gross domestic product. The country is also an exporter of aluminium and cotton.

BHP Billiton and the consortium led by Kazzinc — a Kazakh miner and producer of lead, zinc and copper — were among a group of five bidders for the project. Three Chinese companies had since pulled out of the race, Bakhtdavlatov said.

He said one of the companies was Zijin Mining Group Co Ltd (2899.HK) (601899.SS), which already runs a gold-mining operation in Tajikistan. He did not name the others.

The Konimansuri Kalon deposit is located in northern Tajikistan, about 50 km (31 miles) from Khujand, the country’s second-largest city. Bakhtdavlatov confirmed an earlier forecast that investment of about $2 billion would be required to launch production.

The government estimates 1 billion tonnes of ore reserves with average silver content of 49 grams per tonne. The deposit also contains lead and zinc, as well as minor copper and bismuth mineralisation occurring at depth. (Additional reporting by Roman Kozhevnikov in Dushanbe; Writing by Robin Paxton; Editing by Eric Onstad)

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