Tajikistan Has High Hopes for Kon-i Mansur Silver Mine

• Category: Tajikistan
DUSHANBE (Central Asia Online) – The British-Australian mining giant BHP Billiton is prepared to invest US $3.5 billion (16.8 billion somoni) in Tajikistan. It’s however competing with Kazzinc, a Kazakh mining consortium, for rights to develop the Big Koni Mansur mine.
Mine equipment destroyed during the civil war in Tajikistan

Mine equipment destroyed during the civil war in Tajikistan
Tajikistan has rich deposits of gold, silver, and antimony. The largest silver deposits are in Sughd Province, where Tajikistan’s largest gold mining operation also is located. Russia’s Norilsk nickel company has explored a large new silver deposit at Bolshoy Kanimansur. More than 400 mineral deposits of some 70 different minerals have been discovered in Tajikistan, including strontium, tungsten, molybdenum, bismuth, salt, lead, zinc, fluorspar, and mercury. These minerals have been found suitable for mining.
Rare metals were not mined in Tajikistan before the World War II. The output of concentrates of rare metals in 1943, however, exceeded that of 1941 by sixty times, and that of 1942 by ten times.

“The participation of the world’s leading mining companies in the tender for the rights to develop […] Big Koni Mansur (کلان کان منصور) […] demonstrates the serious intent of foreign investors to work in Tajikistan,” said Jamoliddin Lafizov (جماالدین لفیظوف), assistant to Prime Minister Oqil Oqilov (عاقل عاقلف). “Eight well-known mining companies applied. Those who submitted the most attractive proposal made it to the final stage.”

BHP Billiton and Kazzinc are the last two bidders standing after two Chinese rivals withdrew, citing the cost. Whoever wins the tender will receive rights for 25 years to operate a unique mine on a plateau. The decision will come by the end of the year, the Tajik government said.

“The two companies are preparing feasibility studies for their applications, which must take into account the Tajik government’s terms for creating jobs, developing social infrastructure, and protecting people and the environment,” Lafizov added.

Big Koni Mansur is one of world’s largest silver mines

Proven silver reserves at Big Koni Mansur were determined during the Soviet era at about 50,000 tonnes, according to Tajikistan’s Main Directorate of Geology (MDG). That total equals about 49g of silver per tonne of ore. The same tonne contains 480g of lead and 380g of zinc. The deposit has 1 billion tonnes of ore.

The silver deposit is the world’s second largest, according to the Tajik government. The world’s most productive silver mine is Cannington, a BHP Billiton property in Australia.

Soviet-era projections took only the most conservative estimates into account, geologists say. The ore could be richer than the Soviet estimates.

“The latest appraisal, carried out by Tajik geologists, showed that there could be one and a half times more silver, which is about 75,000 tonnes,” said MDG head Azim Ibrohim. “If, within the next few years, Tajikistan can start developing another silver mine, located in the Pamir Mountains, then the republic could become one of the world’s leaders in (silver) production.”

Tajikistan was not among the top 20 silver producers in 2010, according to the Silver Institute. Mexico was first, while Russia and Kazakhstan ranked 9th and 12th, respectively. Even though the concentration of silver in the ore is considered low, Big Koni Mansur is attracting foreign investors because it is situated in the foothills, near highways and a railway.

With the closure of the uranium mine in Taboshar village, and a number of factories in nearby Kayrakkum, Chkalovsk and Khudzhand, thousands of workers lost their jobs, forcing them to find work in Russia and Kazakhstan. Development of Big Koni Mansur would enable many of them to find jobs near home.

The Tajik government’s main requirement for winning the tender is to create a vertically integrated complex that will do everything from exploration to processing, which would maximise the number of jobs in Tajikistan, according to the State Committee on Investments and State Property Management (SCISPM).

“The company that will create the most jobs will be given preference,” said Shukhrat Rakhmatboyev (شهرت رحمت بایف), first deputy chairman of SCISPM. “This means that the future owner must establish a production chain. […] This approach is based on the government’s view that the project should partially solve unemployment in the nearby towns. We also are keeping tax revenues in mind.”

The winner will have to address issues arising from the relocation of Adrasman village, which stands in the way of mine operation and also would suffer environmental risk from the mine. Among them: creation of a new social infrastructure, transportation and utilities and protection of the environment.

“This is a unique economic project, which has no equal in the history of Tajikistan,” said Davlat Saidov (دولت سعیدف), chairman of SCISPM. “Its implementation will help create up to 15,000 jobs, and the treasury will receive $3-4 billion (14.4-19.2 billion somoni) in tax revenues (annually).”

“The government […] intends to implement the project in compliance with the best international practices and, therefore has brought in the [World Bank Group’s] International Finance Corporation as an advisor,” Saidov said. “It […] has extensive experience in organising and holding international tenders.” Miners like BHP Billiton can process 20-30m tonnes of ore annually, which would yield at least 1,000 tonnes of silver and 8,000-10,000 tonnes of lead and zinc. Silver content of more than 50g per tonne would allow the operator to easily recoup a $3.5 billion (16.8 billion somoni) expenditure in six to seven years.

Problems exist

Some observers are anxious that the government select a winner. “The tender for […] Big Koni Mansur has turned into a saga,” said independent analyst Muhabbat Saidova (محبت سعیدفا). “It has been going on for six years. The applicants are constantly changing. Last year, they said the final stage would take place by the end of the year, but it never did.”

The government should fix the tax system and legislative delays, she recommended, predicting that doing so would spur foreign investment.

Another problem, Tajik scientists warn, is finding storage for radioactive tailings. Nuclear waste is buried in the basin of the silver deposit, not far from uranium mines, warned Isokdzhon Zokirov (اسحاق جان زاکیرف), former Taboshar village head.

“The radioactive waste, which gives off gamma rays, should either be buried more deeply or re-processed,” he said. “Both of these options are quite costly. There are rumours that the government is considering relocating the tailing storage facility near ... the village of Taboshar, which is absolutely unacceptable. This is a dangerous idea.”

The government is considering relocating the facility to somewhere safer, according to Tajik media.