Press release issued by the Tajik Aluminum Company (TALCO) says the current economic crisis has affected the aluminum industry more than the crisis of 2008-2009.
First of all, it is reportedly connected with overproduction, aluminum price stagnation and aluminum production cost rise.
Speed fall in the international aluminum prices that began in July 2013 has resulted in 80 percent of world’s aluminum producers operating without getting profit and most of them are incurring losses, according to the TALCO press release
Considerable financial losses of TALCO are reportedly not occurring from internal factors. “The company is incurring losses mostly due to long transportation arm, geographical remoteness from sources of raw materials and the fall in the international aluminum prices,” the press release says.
According to data from the London Metal Exchange, the price for one ton of primary aluminum has dropped in a year to August 31, 2016 from US$1,760 to US$1,566.
Therefore, TALSO is forced to operate in a rigid anti-crisis regime.
This year, Tajik aluminum smelter is expected to produce 150,000, which is 8,000 tons or 5.3 percent less than it was originally planned, according to the TALCO press service.
Over the first six months of this year, Tajikistan has produced more than 73,000 tons of primary aluminum, which was 13.5 percent more than in the same period last year.
Last year, Tajikistan produced 139,000 tons of primary aluminum last year, which was 14,000 tons more compared to 2014.
In connection with the considerable fall in the international aluminum prices the company’s crisis management has proposed to consider the possibility of reducing the aluminum production volumes for the purpose of minimizing financial losses, the press service said.
Recall that in November last year, the government granted the company licenses to develop two gold deposits in the northern Sughd province, Konchoch and Chulobi. Usage rights over the deposits will extend to 25 years.
This year, the major trading partners to Tajikistan’s primary have been Turkey (more than 70.5 percent or more than 52,300 tons), Taiwan (more than 16,500 tons), the Virgin Islands (288.2 tons), Uzbekistan (133 tons), and Pakistan (about 30 tons).
The Tajik Aluminum Company (TALCO) is one of the ten largest aluminum smelters in the world and provides up to 70% of the country’s foreign currency earnings, consuming 40% of the country’s electrical power. TALCO is wholly owned by the Tajik government. Tajikistan does not mine alumina but imports the raw material through tolling arrangements.
Construction of the Tajik aluminum plant (TadAZ) began in 1972, and the first pouring of aluminum took place on March 31, 1975. On April 3, 2007, TadAZ was officially renamed to TALCO – Tajik Aluminum Company. The Tajik aluminum smelter had the capacity to produce 517,000 metric tons per year.
