Uzbekistan: In Search for Uranium, Japan Enters Risky Market
by Murat Sadykov EurasiaNet.org
A Japanese minerals outfit has signed a deal with Tashkent to begin prospecting for uranium in northern Uzbekistan.
Russia’s state-run RIA Novosti news agency reported
this week, citing a source close to the Japan Oil, Gas and Metals
National Corporation (JOGMEC), that the company and the state-run Navoi
Mining Combine had signed a five-year uranium exploration license for
two blocks in Navoi Region. A minimum investment is set at $3 million.
The deal does not cover extraction: "If [uranium] deposits are
found on the contract area, JOGMEC will be granted exclusive rights to
hold direct talks and sign a production sharing agreement with
Uzbekistan," the source told RIA Novosti.
According to the source, this would be the first agreement for a
foreign firm to explore for uranium in Uzbekistan. Currently, Navoi
Mining Combine has a monopoly to extract and export uranium.
In the past five years, Uzbekistan has tried to attract foreign
investors to develop its black-shale uranium deposits, which require
sizeable investment and expertise, RIA Novosti said. According to the
London-based World Uranium Association, a trade group, Uzbekistan is the world's seventh-largest uranium producer with an annual output of around 2,400 metric tons.
Should it find any uranium, other international outfits’ experience
working in Uzbekistan might be instructive for JOGMEC. For several
years, Uzbekistan has tried, with little success, to lure foreign
investors to explore its oil and gas deposits. In May, Malaysia's
Petronas quit its gas exploration projects altogether, without citing a reason.
Some believe their pullout is related to Uzbekistan’s hostile
investment climate. For example, last year, Russian telecoms giant MTS
had its local assets expropriated during an opaque tax dispute that looked like a pretext to seize the company. UK-based Oxus Gold was forced out in 2011 amid sustained pressure from its local partners to sell its stake at below-market value. And, in 2007, Tashkent canceled its contract with the country's largest mining investor, Newmont, and seized some of its assets.
So many eyes will be on the Japanese company. Will it have more luck working in Uzbekistan?
