Tajikistan: TALCO Loses 600 Workers
Tajikistan industry’s visiting card: That was how President Emomali Rahmon once described aluminum producer TALCO.
But things are looking a bit grim for the company at the moment with the news that it has had to lay off 607 employees, equivalent to 7 percent of the entire workforce, because of low global prices for its product.
Reuters news agency on April 19 cited TALCO press secretary Igor Sattarov as saying that 8,200 workers would be left at the company after the cutback.
Although the loss of employment will come as a massive blow to the laborers affected, the cutback is still quite a bit short of the 2,000 job cuts called for international consultants. Sattarov said TALCO instead opted for a “mitigated plans for the staffing optimization” and has put a number of people on unpaid leave.
International aluminum prices are currently hovering around $1,600 per ton, which marks something of a recovery from the lows seen last year, but still falls short of a figure that would make TALCO seriously profitable.
Wanting to help TALCO out of a tight spot, the government in November 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.
Earlier this year, TALCO also announced that it intends to set up three major industrial projects in Yovon, a town 60 kilometers south of the capital, together with the China National Heavy Machinery Corporation. Asia-Plus reported in January that one plant would be aluminum fluoride production facility with an annual capacity for 18,000 tons, a cryolite plant with an annual capacity of 12,000 tons, and sulfuric acid plant with an annual capacity of 130,000 tons.
Around $88.5 million out of the $126 million being invested in the Yovon projects is being provided by Chinese state credits, only adding to Tajikistan burdensome loans to Beijing.
But things are threatening to turn sour for TALCO with the parliament in Norway investigating the identity of the company’s ultimate beneficiaries. Norsk Hydro, which is more 43 percent controlled by the Norwegian government, has for years been in business with TALCO Management Ltd, which is registered in the famously opaque British Virgin Islands. The suspicion is that President Emomali Rahmon’s family have grown obscenely wealthy from the aluminum company’s sales.
Although the government touts TALCO as its industrial champion, accounting as it does for around one-third of Tajikistan’s exports, the reality is that the company is also a major debtor to the state. TALCO plants eat up around 40 percent of the electricity supply, which is in particularly short supply over the winter.
In 2015, TALCO increased its output of primary aluminum — the first increase in seven years — to 139,000 tons, up from 125,000 tons a year earlier. That is a far cry though from its record year in 2007, when it turned out more than 419,000 tons of primary aluminum.