Identifier
Created
Classification
Origin
06DUSHANBE1424
2006-07-25 11:09:00
CONFIDENTIAL
Embassy Dushanbe
Cable title:
TAJIK INDUSTRY MINISTER WANTS U.S. JOINT VENTURE TO FLY
how-toVZCZCXRO0225 PP RUEHDBU DE RUEHDBU #1424/01 2061109 ZNY CCCCC ZZH P R 251109Z JUL 06 FM AMEMBASSY DUSHANBE TO RUEHC/SECSTATE WASHDC PRIORITY 8194 INFO RUCNCIS/CIS COLLECTIVE RUEAIIA/CIA WASHDC RHEFDIA/DIA WASHINGTON DC RHEHAAA/NSC WASHINGTON DC RUEHAK/AMEMBASSY ANKARA 1722 RUEHBJ/AMEMBASSY BEIJING 1710 RUEHRL/AMEMBASSY BERLIN 1681 RUEHIL/AMEMBASSY ISLAMABAD 1694 RUEHBUL/AMEMBASSY KABUL 1651 RUEHNE/AMEMBASSY NEW DELHI 1644 RUEHLO/AMEMBASSY LONDON 1616 RUEHBS/USEU BRUSSELS 1010 RUCNDT/USMISSION USUN NEW YORK 1231 RUEHKO/AMEMBASSY TOKYO 1437 RHMFISS/HQ USCENTCOM MACDILL AFB FL RHMFISS/HQ USEUCOM VAIHINGEN GE RUEHNO/USMISSION USNATO 1636 RUEKJCS/JCS NMCC WASHINGTON DC RUEHVEN/USMISSION USOSCE 1684 RUEHDBU/AMEMBASSY DUSHANBE 9502
C O N F I D E N T I A L SECTION 01 OF 02 DUSHANBE 001424
SIPDIS
SIPDIS
STATE FOR SCA/CEN, INL
E.O. 12958: DECL: 7/25/2016
TAGS: PREL PGOV ECON EINV TI
SUBJECT: TAJIK INDUSTRY MINISTER WANTS U.S. JOINT VENTURE TO FLY
SOLO
REF: HILLMEYER - HOAGLAND EMAIL 6 JULY 2006
CLASSIFIED BY: Richard Hoagland, Ambassador, U.S. Embassy,
Dushanbe, State.
REASON: 1.4 (a),(c)
CLASSIFIED BY: Richard Hoagland, Ambassador, U.S. Embassy,
Dushanbe, State.
REASON: 1.4 (a),(c)
C O N F I D E N T I A L SECTION 01 OF 02 DUSHANBE 001424
SIPDIS
SIPDIS
STATE FOR SCA/CEN, INL
E.O. 12958: DECL: 7/25/2016
TAGS: PREL PGOV ECON EINV TI
SUBJECT: TAJIK INDUSTRY MINISTER WANTS U.S. JOINT VENTURE TO FLY
SOLO
REF: HILLMEYER - HOAGLAND EMAIL 6 JULY 2006
CLASSIFIED BY: Richard Hoagland, Ambassador, U.S. Embassy,
Dushanbe, State.
REASON: 1.4 (a),(c)
CLASSIFIED BY: Richard Hoagland, Ambassador, U.S. Embassy,
Dushanbe, State.
REASON: 1.4 (a),(c)
1. (SBU) An antimony mining joint venture with New
Jersey-based COMSUP has been so successful, according to
Minister of Industry Zaid Saidov, the Tajik government would
prefer the U.S. firm own one hundred percent of the operation,
rather than 49%. In a July 18 meeting with PolOff, Saidov
explained the Government of Tajikistan's recent proposal to sell
its shares in Anzobskigok, a mining enterprise was not an
attempt to pressure COMSUP, but instead a way for COMSUP to keep
control of the operation in the face of privatization.
2. (SBU) Should COMSUP elect not to purchase the controlling
interest in the joint venture, the shares would go up for
auction in January as part of the state privatization plan.
(NOTE: Under the official privatization plan, most state-owned
enterprises should be privatized in January 2007. In addition
to Anzobskigok, the state-owned companies slated to privatize
include the electric utility Barqi Tojik, Tokjikgas, Tajik
Airlines, and Tajikistan's biggest producer, the aluminum
company TadAZ. However, recent press reporting suggests TadAZ
has been taken off the block. END NOTE.)
3. (SBU) Rather than sell the shares in Anzobskigok to an
untested foreign investor, the Ministry of Industry would prefer
to see COMSUP take ownership of the entire company. Saidov
reported that a number of different companies already expressed
interest in Anzobskigok, including Kazakh and Chinese firms, for
more than double the $3 million it proposed to COMSUP.
Anzobskigok anticipates extracting up to 750,000 tons of ore to
produce 250,000 tons of antimony concentrate by the end of 2006.
4. (SBU) Said indicated the proposal reflected the Tajik
government's limitations on investing in its own enterprises.
If COMSUP were the sole owner, there would be no limitations on
what it put into Anzobskigok. (NOTE: COMSUP has already
invested $4 million in the Tajik venture. END NOTE.) "We want
to attract foreign investment," said Saidov. "This is in both
of our interests." The government would like to see an ore
production facility in Tajikistan, rather than shipping the
concentrate to Kyrgyzstan or China for processing, but cannot
afford to match any new investments. Currently, the antimony
concentrate exported for production contains gold and silver
that never end up profiting Tajikistan.
5. (SBU) COMSUP's contracts and documents establishing the
Anzobskigok joint venture are all legal, confirmed Saidov;
should COMSUP choose not to purchase majority shares, the
contract would still be honored. When the joint venture was
established, foreign companies were required to have a Tajik
partner. Now, under a new law on foreign investment, foreign
investors can own one hundred percent of their operations.
6. (C) COMMENT: Saidov seemed to be operating under good
faith when he suggested the Tajik government was so pleased with
COMSUP, it would rather see them take full control of the
operation than have another investor take part. If this
proposal truly is part of the privatization plan, it represents
a sensible first offer to a company that could lose much should
another investor take 51%.
DUSHANBE 00001424 002 OF 002
7. (C) COMMENT CONTINUED: However, given the example of
Gerald Metals, where the Tajik government refused to honor
agreements signed under one director of a state company after he
was removed from his post, COMSUP is smart to be concerned about
the proposal. It is also unclear whether there are really
foreign investors interested, or whether the Ministry of
Industry is trying to pressure COMUSP to take on more than they
want in Anzobskigok. END COMMENT.
HOAGLAND
SIPDIS
SIPDIS
STATE FOR SCA/CEN, INL
E.O. 12958: DECL: 7/25/2016
TAGS: PREL PGOV ECON EINV TI
SUBJECT: TAJIK INDUSTRY MINISTER WANTS U.S. JOINT VENTURE TO FLY
SOLO
REF: HILLMEYER - HOAGLAND EMAIL 6 JULY 2006
CLASSIFIED BY: Richard Hoagland, Ambassador, U.S. Embassy,
Dushanbe, State.
REASON: 1.4 (a),(c)
CLASSIFIED BY: Richard Hoagland, Ambassador, U.S. Embassy,
Dushanbe, State.
REASON: 1.4 (a),(c)
1. (SBU) An antimony mining joint venture with New
Jersey-based COMSUP has been so successful, according to
Minister of Industry Zaid Saidov, the Tajik government would
prefer the U.S. firm own one hundred percent of the operation,
rather than 49%. In a July 18 meeting with PolOff, Saidov
explained the Government of Tajikistan's recent proposal to sell
its shares in Anzobskigok, a mining enterprise was not an
attempt to pressure COMSUP, but instead a way for COMSUP to keep
control of the operation in the face of privatization.
2. (SBU) Should COMSUP elect not to purchase the controlling
interest in the joint venture, the shares would go up for
auction in January as part of the state privatization plan.
(NOTE: Under the official privatization plan, most state-owned
enterprises should be privatized in January 2007. In addition
to Anzobskigok, the state-owned companies slated to privatize
include the electric utility Barqi Tojik, Tokjikgas, Tajik
Airlines, and Tajikistan's biggest producer, the aluminum
company TadAZ. However, recent press reporting suggests TadAZ
has been taken off the block. END NOTE.)
3. (SBU) Rather than sell the shares in Anzobskigok to an
untested foreign investor, the Ministry of Industry would prefer
to see COMSUP take ownership of the entire company. Saidov
reported that a number of different companies already expressed
interest in Anzobskigok, including Kazakh and Chinese firms, for
more than double the $3 million it proposed to COMSUP.
Anzobskigok anticipates extracting up to 750,000 tons of ore to
produce 250,000 tons of antimony concentrate by the end of 2006.
4. (SBU) Said indicated the proposal reflected the Tajik
government's limitations on investing in its own enterprises.
If COMSUP were the sole owner, there would be no limitations on
what it put into Anzobskigok. (NOTE: COMSUP has already
invested $4 million in the Tajik venture. END NOTE.) "We want
to attract foreign investment," said Saidov. "This is in both
of our interests." The government would like to see an ore
production facility in Tajikistan, rather than shipping the
concentrate to Kyrgyzstan or China for processing, but cannot
afford to match any new investments. Currently, the antimony
concentrate exported for production contains gold and silver
that never end up profiting Tajikistan.
5. (SBU) COMSUP's contracts and documents establishing the
Anzobskigok joint venture are all legal, confirmed Saidov;
should COMSUP choose not to purchase majority shares, the
contract would still be honored. When the joint venture was
established, foreign companies were required to have a Tajik
partner. Now, under a new law on foreign investment, foreign
investors can own one hundred percent of their operations.
6. (C) COMMENT: Saidov seemed to be operating under good
faith when he suggested the Tajik government was so pleased with
COMSUP, it would rather see them take full control of the
operation than have another investor take part. If this
proposal truly is part of the privatization plan, it represents
a sensible first offer to a company that could lose much should
another investor take 51%.
DUSHANBE 00001424 002 OF 002
7. (C) COMMENT CONTINUED: However, given the example of
Gerald Metals, where the Tajik government refused to honor
agreements signed under one director of a state company after he
was removed from his post, COMSUP is smart to be concerned about
the proposal. It is also unclear whether there are really
foreign investors interested, or whether the Ministry of
Industry is trying to pressure COMUSP to take on more than they
want in Anzobskigok. END COMMENT.
HOAGLAND