Tajik-Chinese Joint Venture (JV) Zarafshon, which is a leading gold mining company in Tajikistan and accounts for about 70 percent of Tajikistan’s gold production, has been exempted from paying the value added tax (VAT) and customs duties on the imports of certain goods, technologies and equipment.
The list containing 244 items of goods, technologies and equipment has been approved by a government resolution of July 13 this year, which is posted on the Justice Ministry’s website.
The resolution, in particular, says these benefits are provided within the framework of the agreement between the Government of Tajikistan JV Zarafshon on the integrated development of Taror and Jilau deposits and construction of a metallurgical plant for the integrated extraction of gold and copper.
Taror and Jilau ae considered the largest gold deposits in Tajikistan. They are situated 44 kilometers from the Tajik northern city of Panjakent in Sughd province.
The agreement was signed on December 12, 2021. The construction of the metallurgical plant is expected to be completed by the end of 2023.
The company undertakes to invest in stages US$117 million in integrated development of the deposits and construction of the plant. The agreement will be valid for 10 years from the date of entry into force.
Independent experts have repeatedly called for abandoning the practice of targeted granting of preferences as they create obstacles to healthy competition.
Tajik-Chinese Joint Venture (JV) Zarafshon (formerly Zervashan Gold Company) is the largest gold mining company in Tajikistan.
Zeravshan Gold Company (ZGC) was launched as a joint venture with Nelson Resources Ltd (44%) and the Tajikistan government (51%) and the IFC (5%) in 1994. In September 2002, Avocet signed a heads of agreement to acquire the Tajik gold assets of Toronto-based Nelson Resources Ltd held through Nelson’s subsidiary, Commonwealth and British Minerals Ltd. The assets included a 44% interest in ZGC. In November 2004, Avocet increased its equity interest in ZGC from 49% to 75%. In late July 2007, Avocet sold its equity stake in ZGC to China’s Zijin Mining.
JV Zarafshon owns gold mining and exploration rights to a 300,000-hectare area near the town of Panjakent in northern Tajikistan.
Zijin Mining, which owns 75% of shares in the JV Zarafshon, reportedly sold 5 percent of shares to the Tajik government for 1.00 U.S. dollar in 2018. The government endorsed a draft agreement on this subject on February 5, 2018, and the head of the State Committee on Investment and State-owned Property Management (GosKomInvest) was committed with signing the document on behalf of the Government of Tajikistan.
Tajikistan has 137 deposits with estimated reserves of industrial gold and 127 deposits of non-industrial gold. Tajikistan plans to increase annual production of gold to 17 tons beginning on 2022.
Four large gold mining companies now operate in Tajikistan: Tilloi Tojik; Tajik-Chinese JV Zarafshon; Tajik-Canadian JV Aprelevka; and China Nonferrous Gold Limited, which is the first foreign company to obtain 100% ownership of a mining and exploration project in Tajikistan. Besides, several other enterprises are engaged in gold production in the country.
Most of gold comes from the Jilau deposit operated by Tajik-Chinese joint venture, Zarafshon, which reportedly accounts for more than 70 percent of the total amount of gold produced in Tajikistan.
