Silver Lining? Tajikistan defends controversial decision to give mine to China
Tajik authorities are defending their decision to give a Chinese company the rights to develop a major silver mine in a move seen by some as great for Beijing but providing unknown benefits to Dushanbe.
After less than 30 minutes of debate, the Tajik parliament on October 1 approved a contract signed by the state Committee on Investments and State Property and China’s Kashgar Xinyi Dadi Mining Investment Company in June to develop the Yakjilva silver deposit in the remote eastern district of Murghob.
The next day, the provincial government of the Autonomous Gorno-Badakhshan Region, where the mine is situated, defended the parliament’s decision by saying the foreign investment creates much-needed jobs and generates revenues for the state.
In an apparent bid to respond to social-media criticism of the deal, the local government noted the mine’s difficult to access, high-altitude location.
“The Yakjilva mine has only 415 tons of silver deposits, is situated some 4,500 meters above sea level, and there is no electricity, water, or roads there,” the government said in a statement. Other sources put the amount of the silver deposit in Yakjilva at around 205 tons.
Silver is currently priced at about $56 for 100 grams on the world market.
The statement urged “all compatriots to try to properly understand the issue before expressing opinions about it.”
“It doesn’t mean selling or giving away the country’s natural resources and it’s not some form of settling the [country’s external] debts. It’s a routine…foreign investment project,” it added.
Tajikistan owes China $1.2 billion, nearly half of the country’s foreign debts of $2.9 billion.
The statement said the duration of the contract with the Chinese company is 20 years with the possibility of extending it if both sides agree.
Not much information has been made public by either side about any of the details of the agreement. With virtually no discussion on the issue in parliament, no one is sure what motivated Tajik officials to make the deal.
During the parliament session, Farrukh Hamralizoda, the head of the Committee on Investments and State Property, said that in the first seven years of its activities in Yakjilva the Chinese company will be exempt from paying taxes on its revenues and on any customs duties for the equipment that it brings into Tajikistan.
A company representative told the lawmakers that the firm has hired more than 100 Tajiks to work at the mine along with about 70 Chinese employees.
Chinese companies operating in Central Asia often bring in the majority of their workers from China, leaving many locals upset that such foreign investments aren’t helping the local economy by hiring natives.
The Chinese representative said local employees earn about $270 a month on average.
Tajik lawmaker Abduhalim Ghafforov criticized the amount as “miserable” for working in the high-altitude region that under Tajik law requires hazardous pay for the employees due to the hardship.
The decision over Yakjilva brought criticism from some social-media users in Tajikistan who expressed concern about “selling out” the country to China.
Some recalled an unpopular move by Tajik lawmakers to ratify in 2011 a deal to cede over 1,000 square kilometers of land in the Pamir mountains to China to resolve a border dispute.
Hojimuhammad Umarov, a Dushanbe-based expert on finance and economy, told RFE/RL’s Tajik Service that Tajikistan should not sign away the exploration rights of its mineral reserves to foreign companies.
“These resources belong to our people and we need these riches for our own future,” he said on October 1.
The Yakjilva contract has sparked concerns among some Tajik experts since it was signed on June 14, ahead of Chinese President Xi Jinping’s visit to Tajikistan to attend a summit of the 27-member regional grouping called the Conference on Interaction and Confidence Building Measures in Asia.
Many Tajik experts and ordinary people alike have called for transparency in all investment deals that affect the nation’s natural resources.
“With such investments, [China] makes our country increasingly dependent on it and effectively takes control of our mineral resources,” Dushanbe-based expert Parviz Mullojonov said at the time.
The Yakjilva mine adds to neighboring’s China’s growing stake in Tajikistan. China’s mining companies are major stakeholders in Tajikistan’s largest gold mines in the Panjakent, Aini, and Vahdat regions.
In 2007, China’s Zijin Mining acquired 75 percent of an equity stake in the Zarafshon gold mine in northwestern Tajikistan. The gold there reportedly accounts for more than 70 percent of the total amount of gold production in the country.
Tajikistan’s other agreements include Chinese investment in the Kumarghi Bolo and Duobai Sharqi gold mines in the northern Aini district.
With an estimated 429 tons of gold deposits, Tajikistan plans to increase its annual production of the treasured ore to 17 tons starting in 2022.
Not a major holder of gold, Tajikistan ranks 67th on the list of the 100 largest countries with gold reserves.
But China is expected to continue to play a major role in its much smaller neighbor’s precious ore ambitions.
The Yakjilva silver mine, which was discovered in the 1960s, was being explored by the Kazakh-based company C.A. Minerals in recent years.
The mine is located not far from a Chinese military outpost, described by The Washington Post as a modest complex of some two dozen buildings and lookout towers.
Beijing and Dushanbe have never publicly acknowledged the existence of the base.
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