Tajik mine tender close to collapse as BHP Billington pulls out

By bne IntelliNews July 16, 2012

Clare Nuttall in Almaty -

BHP Billiton, one of just two companies still in the running to develop Tajikistan's largest silver deposit, has pulled out, leaving the future of the country's first open international tender process in doubt.

Reports in the Tajik press say that the Anglo-Australian mining company has informed the tender commission that it is withdrawing its bid to develop the Konimansur Kalon silver-lead-zinc deposit in north Tajikistan. This leaves only one bidder, a consortium led by Kazakhstan's Kazzinc which includes Kazzinc's parent company Glencore International, as well as Konimansur and Adrasman.

The consortium may now win by default, a Tajik official has indicated. A decision on the tender was due to be made in September, but after BHP Billiton's withdrawal it may be brought forward, an official at Tajikistan's Main Geology Directorate told Asia Plus.

BHP Billiton's decision to withdraw is clearly a blow for the government, which had hoped that the competition would help put the country on the map for international investors. It is the first time an open competitive tender has been used for a mine development project of this scale and complexity in the entire Central Asian region. Reflecting the ambition, Dushanbe had been working with the IFC to ensure the process was fair and transparent.

Bidders for the deposit have been gradually whittled down, with three initial bidders failing to qualify and two Chinese bidders - Ziti Mining and Sichuan Group - later withdrawing. The reason for BHP Billiton following suit is not known, and the mining company has not confirmed the report.

The tender has already been delayed several times, as the Tajik government addresses issues such as the tax regime for the eventual developer. Substantial infrastructure development will also be needed, with total investment of around $3bn likely, an IFC source told bne earlier this year. Another issue is that the deposit is situated directly under the town of Adrasmon, near Tajikistans border with Kyrgyzstan - requiring the relocation of some 13,000 people.

However, should development of the deposit go ahead, it could transform the economy of Central Asia's poorest country. Konimansur Kalon contains around 1m tonnes of ore, and estimated silver reserves of around 70,000 tonnes. Some 10,000 people will be employed during the construction phase.

Related Articles

Retail trade slows in Kazakhstan amid economic uncertainty

Naubet Bisenov in Almaty - A free-floating exchange regime for Kazakhstan’s currency, the tenge, is taking its toll on retail trade as the cost of imports rise. While prices have not changed ... more

bne:Chart - Russia begins to steady the ship according to latest Despair Index

Henry Kirby in London - Ukraine and Russia’s latest “Despair Index” scores suggest that the two struggling economies could finally be turning the corner, following nearly two years of steady ... more

New Kazakh central bank governor re-adopts free floating regime

bne IntelliNews -   The National Bank of Kazakhstan, the central bank, has re-adopted a free-floating exchange regime under the new governor, Daniyar Akishev, who has ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss