DUSHANBE, July 5, 2008, Asia-Plus — Tajikistan Aluminum Company (Talco) has officially denied information about the possible sale of its controlling ownership interest to India”s aluminum producer, National Aluminium Company Ltd (Nalco), as unfounded.
Speaking in an interview with Asia-Plus, ms Sabohat Qodiova, a spokeswoman for Talco, said that no negotiations have been conducted on this subject.
“Talco is the state unitary enterprise but not joint-stock company. It does not have the right to sale its shares,” said Qodirova, “Moreover, high-ranking country’s state officials have repeatedly noted that the Tajik aluminum plant will not be privatized.”
She noted that over the past years, the smelter has run at a good profit. Sale of the company, which provides 75 percent of the country’s currency earnings, under conditions of high world aluminum prices does not meet national interests of Tajikistan,” the spokeswoman said.
Located in Tursunzoda, the Tajik aluminum smelter is the largest aluminum producer in Central Asia, and is one of Tajikistan”s largest enterprises.
We will recall that some media have released reports that Nalco intends to acquire the 51 percent ownership interest in Tajikistan Aluminum Company.
Thus, India’s The Financial Express posted an article entitled “Nalco eyes 51% stake in Tajikistan”s Talco” on it website on July 3.
The article, in particular, says that India”s second largest aluminum maker, National Aluminium Company Ltd (Nalco) is set to acquire 51% in Tajik Aluminum Company (Talco) — a deal that will see the combine emerging as one of the world”s top-three aluminum producer with an output of 8,00,000 tons.
“According to sources, Nalco has approached the government with the proposal and is awaiting its approval,” the article said. “In 2007-08 Nalco produced 4,684,684 tons of bauxite and 359,213 tons of aluminum. According to sources Talco wanted to buy aluminum without going for the global tendering process being adopted by Nalco. Talco relies entirely on imports to run its smelters and the acquisition will now provide it the necessary raw materials by virtue of access to bauxite mines of Nalco.”
However, Nalco now feels that instead of supplying alumina, it would like to acquire 51% stake in the equity and management control of Talco. Sources added that the matter was under consideration of the Tajik government and Nalco would approach the Cabinet for approval if the signs are positive, according to the article. “The cost per unit of production will come down and Nalco will benefit from the existing smelters of Talco. However, Talco is not technologically advanced and an acquisition of an aluminum company in South Korea could have been a better choice,” said KPMG director, tax and regulatory Nabin Ballodia.
Acquiring Talco — 100%-owned by the Tajikistan government can face some roadblocks. The Tajikistan authorities had shown its willingness to privatize Talco but wanted to retain the majority stake and an acquisition by Nalco can prove to be a tricky issue.
For Nalco, which has rolled out significant outbound plans, the benefits will be in the form of acquiring smelter plants which are world leader in production. Also the cost of power generation is significantly cheaper in Tajikistan and will benefit the company since production of aluminum is high power consuming, the article said.
