A major Chinese construction and engineering company agrees to help develop Russia’s largest titanium deposit located in the Arctic
Expansion of an Arctic deepwater port and a new railroad to the port are also part of the development plans.
Chinese investment and interest in Russia’s Arctic natural resources continues unabated. In addition to receiving regular shipments of LNG and crude oil, one of China’s major engineering and construction companies is partnering with Russian Titanium Resources to develop a massive mineral deposit in the Russian Arctic.
Russian Titanium Resources (Rustitan) and China Communications and Construction Company signed an agreement for the development of the Pizhemskoye mining project in the Komi Republic.
The cooperation extends beyond the mining of titanium and includes a host of related infrastructure development including expansion of the Arctic deep water port of Indiga and construction of the Sosnogorsk-Indiga railway connection. The region’s mining cluster extends beyond titanium into other minerals, including zircon, iron ore, and gold.
A key aspect of the project is the transport component allowing for the export of materials through Urals and Siberia and funneling cargo onto the Northern Sea Route (NSR).
Rustitan was founded in 2007 focusing primarily on the mining of titanium and quartz raw materials. The company discovered the Pizhemskoye deposit, located in the Ust-Tsilemsky district of the Komi Republic, in 2021. The field is home to Russia’s and the world’s largest titanium ore reserves. Pizhemskoye contains more than 80 percent of the country’s titanium ore reserves.
China Communications and Construction Company has been involved in a number of the country’s Belt and Road Initiative projects, though it has repeatedly faced scrutiny for its financial practices and has been subject to U.S. sanctions for more than a decade.
More cargo for the NSR
The Pizhemskoye project is a key component of the Kremlin’s official 2020 Arctic investment plan, also called “Strategy of Development of the Arctic Zone of the Russian Federation for the period to 2035.”
An expanded deep-water ice-free seaport of Indiga would become an additional point of cargo volume for the Northern Sea Route. Similarly the Sosnogorsk-India railway is a strategic transport lane to increase the flow of mineral resources toward the NSR.
According to the Northern Sea Route administration it expects Indiga to handle up to 30m tons of cargo before the end of the decade with up to 80m tons in the 2030s.
In addition to the meeting between Rustitan and China Communications and Construction Company, a second meeting took place with the China Railway Construction Corporation, the second largest state-owned construction company in China.
“We have reached an agreement with our Chinese partners on the establishment of a joint company, and today such an Agreement is at the development stage. Combining the accumulated competencies of our organizations, both in construction and in financing infrastructure projects, will have a significant synergistic effect for the domestic market,” a company representative explained.
In additional news related to the project, Rustitan announced last week that it had been granted a patent related to the beneficiation, or processing, of titanium ores from the Pizhemskoye deposit specific to the metallurgy present at the deposit.
World’s largest titanium exporter
China is the world’s largest producer and exporter of titanium and as a result is also one of the leading importers of titanium ore required to produce the alloy.
Lightweight titanium alloys are used extensively in the aerospace and defense industry during the production of jet engines, missiles and spacecraft.
Prior to western sanctions Russia’s largest producer VSMPO-Avisma supplied around 30 percent of titanium needs for the global aerospace industry, with US’ Boeing receiving 40 percent of its titanium from Russia and its European rival Airbus procuring up to 60 percent from Russia, High North News writes.
China makes fresh forays into gold mining sector in Tajikistan
Chinese investors often get generous tax breaks in the country.
Tajikistan’s president traveled to the northern Sughd region on April 14 to oversee the opening of a new gold processing plant built by a Chinese investor at a cost of around $136 million.
The enterprise, Talco Gold, will produce up to 2.2 tons of gold and 21,000 tons of antimony annually, according to government officials.
China is by far Tajikistan’s main source of foreign direct investment. In 2021, businesses from China invested more than $211 million in Tajikistan, an amount that account for nearly 62 percent of the global FDI figure. Those funds mainly went toward the extraction and processing of lead, zinc and tin ores, and the mining of precious and semi-precious gems and metals.
Talco Gold is a joint venture between the Talco Aluminum Company, a Tursunzoda-based company said to be owned Hasan Asadullozoda, the brother-in-law of President Emomali Rahmon, and China’s Tibet Huayu Mining.
The company has promised it will provide jobs for 1,500 people, most of them Tajik nationals. That prospect comes at a fortuitous time, just as Tajikistan faces the prospect of a fresh economic crisis precipitated by international sanctions on Russia, where hundreds of thousands of Tajiks travel annually for seasonal labor.
Work on building the processing facility in the Sughd region, which will work with material mined at the nearby Chulboi, Konchoch and Shakhkon deposits, had begun four years ago, but was delayed by the onset of the COVID-19 pandemic.
Talco is ostensibly an aluminum concern, but it began to branch out in 2015 as a result of a state-designed program to prop up the company. As part of that program, the government handed the company a 25-year concession to the Konchoch gold and silver deposits.
Chinese investments invariably arrive with many strings attached – not least because Tajikistan is deeply in debt to Beijing. According to the Finance Ministry, Tajik debt to China as of January 1 amounted to $1.1 billion, which is almost exactly one-third of the country’s overall external debt.
Some economic experts cast doubt on whether China’s debt strategy for Tajikistan brings sufficient rewards.
“China gives money as a loan to Tajikistan for specific projects, and often the parliament approves tax exemptions during the construction period,” one analyst told Eurasianet on condition of anonymity, as criticism of the government can incur reprisals. “Construction equipment is brought in from China, Chinese workers are engaged in the building. As a result, all the money goes back to China, and Tajikistan remains saddled with the debt”, Eurasianet writes.