The investments generate money for the government but harm local populations
Originally published on Global Voices
Image via Canva Pro.
China controls over 75 percent of Tajikistan’s output of gold and for the last 30 years, it has remained the biggest foreign investor in the country’s struggling economy.
There are currently 40 known gold deposits in the country with an estimated 500 tons of total gold resources — much of which has remained unexplored.
The government of Tajikistan has strategically focused on increasing mining production for the three decades since its independence in 1991. This is because 93 percent of its territory consists of mountainous areas that contain more than 50 types of minerals, including silver, gold, zinc, and molybdenum.
Tajikistan's Pamir Mountains, heading toward the Khargush Pass in Tajikistan. Image via Flickr License CC BY 2.0
However, as the poorest country in Central Asia in terms of GDP per capita, Tajikistan has generally lacked the financial resources to develop new mines or expand output at existing ones. Therefore, China’s interest in gold mining has been very useful for Tajikistan. But the inflow of Chinese capital into Tajikistan’s gold mining sector has been a double-edged sword, raising several critical issues, particularly with regard to environmental risks and damages, and labor rights.
While efforts are being made in some countries to reduce the environmental impact of gold mining, in most jurisdictions, it remains one of the most toxic industries in the world. Gold mining frequently contributes to deforestation, soil erosion, and contamination of water sources with hazardous chemicals like cyanide and mercury, which are used in the mining process. These environmental impacts not only threaten local biodiversity but also jeopardize the health and livelihoods of communities dependent on these ecosystems.
In almost 20 years Tajikistan increased its gold production more than tenfold, from 1 ton in 1995 to almost 12 tons in 2022, with Chinese companies and joint ventures playing a major role.
Overall, China is by far Tajikistan’s main source of foreign direct investment. In 2021, businesses from China invested more than USD 211 million in Tajikistan, representing 62 percent of total foreign investment for the year. This investment mainly went toward the extraction and processing of lead, zinc, and tin ores, and the mining of precious and semi-precious gems and metals.
“Zarafshon,” the leading gold producer in Tajikistan which accounts for 70 percent of Tajik gold output, is co-owned with Zijin Mining Group, China’s main gold producer. However, it is hard to call “Zarafshon” an equal partnership between the two sides, with the Tajik state owning 25 percent and Zijin Mining holding a controlling 75 percent of the enterprise.
The gold deposit being developed by the joint venture is located 300 meters away from Khumgaron village in northern Tajikistan. This is a mountainous area where cattle breeding is traditionally the main source of income. Local residents remember that 25 years ago, their village was beautiful and unspoiled, with fresh air and clean water. When Zarafshon started their operations there in 1997, not much changed at first, but with the expansion of mining activities over the years, more and more land was being taken for gold mining and production, leaving local residents with little pasture for cattle grazing. Firuza Kakhkhorova, a resident of Khumgaron village, says, “They took our lands, which we used to graze our cattle, and now we have no space to do so.”
In 2023, Zarafshon launched a metallurgical plant for the integrated extraction of gold and copper in Penjikent, in northern Tajikistan. The plant’s capacity allows it to process 165 thousand tons of gold-copper concentrate annually. While this project is presumably bringing profits to the company’s shareholders (including the Tajik state) and employment for some, there are clear negative consequences for local people. One local journalist, who visited the area and spoke to Global Voices on the condition of anonymity, reports that “smoke coming out of this factory is so strong that leaves on the trees are gray from the dust. Ultimately, this creates health problems for the local residents and people complain of respiratory problems.” According to this journalist, for the last ten years, local residents have been begging local authorities to relocate them further away from the gold mining operations. Despite multiple reassurances that this would happen, nothing has been done, and “the prospect of being relocated is almost non-existent.”
Face excavator and UAZ-469 in Tajikistan. Via Wikipedia Creative Commons license CC BY-SA 2.0
Local residents are also highly concerned about water pollution. In a video published by Radio Free Europe/Radio Liberty (RFE/RL) in Russian, one of the local villagers says that “they [Zarafshon] are using cyanide to develop and mine gold. It causes great harm to people. It was bad enough when the first factory was built in the lower reaches of the village, and now they are building a new one in the upper reaches near the source of our stream. Our water is already undrinkable and if they start working by the source of the stream it will become even more toxic.”
Another joint venture, called the Tajik-Chinese Mining Company, is active in mining for gold and other minerals in Zarnisor village in northern Tajikistan. The license for these mines was issued in 2006 and the first gold was produced in 2016. According to a journalist who visited this area, who preferred to stay anonymous for security reasons, local villagers here are also facing water problems. Because this is a mountainous area, people depend on water from mountain streams, but in recent years as the Tajik-China Mining Company expanded its operations, the available water has been redirected to meet the needs of the mining activity, leaving local villages with either 30 minutes of water per day or no water at all.
Labor practices associated with Chinese mining investments have sparked significant controversy in Tajikistan. There are frequent complaints about poor working conditions, low wages, and the employment of Chinese workers over local labor. In 2021, Tajik workers in the Upper Kumarg gold mine, owned by Chinese TBEA, started a strike over bad food in their canteen. This mine is located high in the mountains and workers who spoke on a condition of anonymity complained that the food that was provided was, as the workers put it, “not nutritious and low quality.”
Moreover, there is a huge discrepancy in the wages of Chinese workers and Tajik workers. According to the local journalist who spoke to Global Voices on conditions of anonymity, Tajik workers’ average wage is USD 300–400 per month, whereas Chinese workers receive USD 5,000 as well as other benefits. Tajiks who work at Zarnisor mine are all local villagers and this is the only employment available for them in the area.
In 2018, Chinese company TBEA received a license to develop a big Tajik mine, Upper Kumarg, which according to the local geologists, has 30 tons of gold. In return, China agreed to build the power station “Dushanbe-2.” Construction of this power plant was 95 percent financed by Chinese Eksimbank. The terms and conditions of the agreement between the two stated that TBEA can extract gold until Tajikistan fully pays back the loan. This project was hailed by the Chinese state media the People's Daily as contributing to the local economy. However, there is no information available about when and how this repayment is going to happen.
China is the world's leading gold producer, accounting for 11 percent of the global gold production, so why would China need to invest in Tajikistan? One of the reasons is that China isn't rich in gold. Its domestic gold production has been decreasing for years. The country's gold industry heavily relies on imported raw materials.
The lack of stringent environmental regulations and enforcement in Tajikistan allows Chinese mining companies to operate with minimal accountability, increasing environmental harm.
While Chinese investments in Tajikistan's gold mining sector bring much-needed capital and development opportunities, they also present numerous challenges. Environmental degradation, economic dependency, labor disputes, and geopolitical ramifications are critical issues that need to be addressed to ensure that these investments benefit Tajikistan sustainably and equitably.
While some Tajiks are pushing the government to implement robust regulatory frameworks and engage in transparent, equitable negotiations with Chinese investors, given the track record of the Tajik government addressing such issues, it is unlikely that these measures will be addressed anytime soon. For the time being, the Tajik government is more focused on expanding gold mining and getting investment, rather than the environmental degradation of gold mining regions.
