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By John Helmer in Moscow

Mystery American company takes concession to mine large antimony reserves in Tajikistan.

Antimony is one of the rare metals for whom new applications are being devised in electronics, battery manufacture, and flame retardants, but whose worldwide supply is fast running out.

That imbalance between supply and demand makes for highly volatile prices, and the behaviour of the Chinese, who control the world’s largest reserves and annual output, as well as the world’s largest demand, has driven the price cycle sharply up and down over the past decade. Antimony hit its previous price peak in 1995-96, at $5,000 per metric ton, or about $2.27 per pound. The price then collapsed by December 2001 to $1,000/tonne, 45 cents/lb. The revival of Chinese demand, outstripping domestic production, started the price moving upward since then. It reached $5,350/tonne, $2.43/lb, in July 2007. Industry projections for antimony indicate that it will strike $6,000/tonne, $2.73/lb, later this quarter, and remain at least as high for the next three years.

Like so much else, the China super-cycle in antimony means that speculators are as drawn to the stuff as medieval alchemists were. The latter thought antimony could be turned into gold by chemical manipulation. But those who tried that found it was poisonous on contact – as lethal as arsenic. It is believed that the metal’s odd name in Latin, from which we derive its English name, derives from the belief that it was an antimoine, a “monk-killer”. Modern speculators know how to convert antimony into gold, without hazardous handling. Especially in the poorest of the former Soviet republics, Tajikistan.

Reports by the US Geological Service (USGS) indicate that last year, out of global production of 134,000 tonnes of antimony, 110,000 tonnes came from China; that’s 82% of the world market. Bolivia came next with 6,600 tonnes; South Africa with 6,000 tonnes; Russia with 3,500 tonnes; and Tajikistan with 2,000 tonnes. In percentage terms, Australia has been the biggest gainer in the new antimony mining market, with 1,900 tonnes in 2006, up 58% since 2002. Tajikistan has been the biggest loser in the same period, down 30%.

Soviet geologists found that Tajikistan held the largest known antimony reserves in the USSR. Exactly how big the reserves are isn’t known for certain, because at the breakup of the Soviet Union, Tajikistan disintegrated into civil war; and enterprise management and geological exploration disintegrated. Reserve data for Tajikistan in Moscow are not treated as reliable any longer. What is more reliable is that control over Tajikistan’s antimony, like most other mineable and tradeable assets in the country, is vested in the President of Tajikistan, Emomali Rahmon. He, in turn, appears to have given the antimony concession to his brother-in-law, Hasan Saduloev.

The Soviet plan for Tajik antimony envisaged that the Jijikrutskoye deposit (antimony and mercury) would generate about 700,000 tonnes of ore for processing at the Anzob plant. The concentrate would then be shipped north to the Kadamzhai Antimony Combine, Kyrgyzstan, for refining into metal. In 1994 a World Bank report claimed there were 5.7 million tonnes of ore left in the Jijikrutskoye deposit, containing 3% antimony (171,000 tonnes). The Bank also identified a second deposit, Skalnoye, with 35,000 tonnes of proven antimony, and an estimated resource of 109,000 tonnes. Supposing these numbers to approximate current Tajik reserves of the metal, then at a projected price of $6,000/tonne, Tajikistan may be holding between $850 and $1,000 million worth of mineable value.

The World Bank warned, however, “for investments in existing mining operations, issues of viability, ownership, and environmental impact of existing mining and related metallurgical operations must be resolved.”

A Tajik mining source told Mineweb that a licence to develop a new mine at Skalnoye has not been issued yet. “Last December,” he said, “the government almost issued an exploration license, but everything got stuck.”

At the Anzob mine, according to the source, annual production is currently running at 30,000 tonnes of concentrate out of throughput of about 300,000 tonnes of mined ore. The concentrator and mine are both operating well below their design capacity. International sources, including the USGS, estimate annual production of antimony metal in Tajikistan at 2,000 tonnes in 2006. A smelter at Isfara, intended in Soviet days for production of rare metals and dating from 1947, substitutes for the old chain of production in Kyrgyzstan. But according to USGS estimates, Isfara is small, with annual capacity to turn out just 500 tonnes of antimony metal.

Most sources believe that Tajik antimony exports are shipped, in both concentrate form, and also as metal, and the main buyer is China. If so, the value for last year would be between $10 million and $15 million. But finding this in Tajikistan’s official export statistics isn’t easy. It is alleged that the export value goes unrecorded by design. But counting tonnage, value and direction of trade for Tajikistan’s antimony is not only the only problem.

The source said that in the Soviet period, Anzob was the leading mining and processing combine for antimony in the USSR. In 2001, it passed into the hands of an Austrian of Turkish origin, named Hussein Unal. He defaulted on investment obligations that came with the operating concession, and lost the asset when it was reclaimed by Rahmon’s government as a state enterprise.

In September 2006, as state media announcements confirm, it was privatized. Official press releases and local press reports indicate that the government sold 51% of the shares in Anzob, and retained the remainder. The purchase price was 11 million somoni, equivalent to $3 million.

An investment condition requires the new stakeholder to invest $15 million in repairs, upgrades, and modernization of the production lines at the plant, restoring the combination to Soviet design capacity of 700,000 tonnes of ore per annum.

The government press reports indicated that the single operational production line at Anzob was converting 350,000 tonnes of ore into 12,000-14,000 tonnes of concentrate. This is significantly less than other reports suggest.

A bigger mystery is the identity of the winner of the concession, and now Tajikistan’s leading antimony miner. This is reported as an American company called Comsap. Nothing other than its purported nationality was released when the government concluded its privatization of Anzob in September 2006. Six months earlier, in April, the Tajik media reported that a delegation of Tajik officials had been in the US, where they had received a declaration of intention from Comsap to invest $50 million. But that was reported to be for gold and silver prospecting in the northern district of Ayni, not at Anzob in the south.

No trace of Comsap can be found as a publicly listed company in the US. Nor has any record been found of Comsap as a private US mining company. The only public evidence of its existence is the announcement of last September as the new concessionaire for Tajik antimony at Anzob.

A Tajik source told Mineweb he believes that Comsap is controlled by Hasan Saduloev, chairman of Orienbank, one of the largest of the Tajik banks, and brother-in-law to President Rahmon. A mining source in Dushanbe told Mineweb that Comsap is a private company established by two members of the Bollag family of New York. They reportedly also hold a lucrative molbydenum mining concession in Azerbaijan. The mining source confirmed the link between the Bollags and Saduloev. Saduloev is being sought for comment on this claim.

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