MAC: Mines and Communities

Newmont profits from Uzbekistan while state murder, torture and impoverishment prevail

Published by MAC on 2006-03-04

Newmont profits from Uzbekistan while state murder, torture and impoverishment prevail

4th March 2006

The London-based Institute for War and Peace Reporting (IWPR) has published another graphic account of daily life in part of the former USSR, following the collapse of state capitalism. The focus is on Uzbekistan - probably the most repressive of former Soviet-ruled states - and in particular a vast coal field which formerly powered a wide range of industries.

The conditions described are virtually indistinguishable from those prevailing in so-called "lesser developing" coal-rich regions- - such as Shanxi province in China, northeast India or Colombia - where young people scrabble to support their families, as health, social cohesion and employment opportunities deteriorate.

Amnesty International's latest report on Uzbekistan (January 26 2006) indicts the government for torture, arbitrary executions, and a refusal to allow any kind of independent investigation of the May 2005 massacre in the town of Andizhan, when hundreds of peaceful demonstrators were mown down and killed by police. The European Union has imposed an embargo on sales of military equipment to the country, and blocked diplomatic exchanges.

Nonetheless, the biggest foreign company investing in Uzbekistan continues to operate without apparently raising a finger against the continuing state of terror.

NEWMONT MINING concluded a direct joint venture with the Uzbek government in 1991 - the first overseas company to do so in any part of the FSU (Former Soviet Union).

The Zarafshan-Newmont Joint Venture uses cynaide heap-leaching to extract gold from the Muruntau mine tailings, an operation scheduled to continue until 2011, employing around 800 people and, according to Newmont, having provided $0.5 billion to the government's coffers since it came on-stream.

Newmont was forced by the US government, and others, to withdraw from Burma in the late 1990s, because of its involvement with the SLORC military junta.

Unfortunately, to date, little pressure has been put on the company to withdraw from Uzbekistan, despite its being the biggest single foreign investor in the regime [Nostromo Research, London]


Angren was once the pride of Soviet Uzbekistan, but residents now scrape a miserable existence.

by IWPR staff in London, Ventral Asia update

17th February 2006

In a scene straight out of a 19th-century painting, a caravan of sack-laden donkeys driven by young teenage lads slowly wends its way across a broad road against a mountainous backdrop.

Recently widened and asphalted, the main road from Tashkent to the Fergana valley is the pride and joy of the Uzbek government, as it leads to a new tunnel right through the mountains which makes the trip a lot less arduous. But here in the Ahangeran valley, before you start the climb to the crossing point, life seems to be going back rather than forwards.

In Chinar, like a good number of the villages scattered along the highway, many people earn a living by laboriously digging out coal by hand and selling it in bagfuls by the roadside.

It wasn't always like this. The city of Angren and the surrounding region used to be the powerhouse of Soviet Uzbekistan, with a rich coal seam providing enough fuel for a string of big industrial plants.

Even in antiquity people were aware of the mineral riches hidden in these Central Asian mountains. The name Ahangeran itself refers to the deposits of iron ore.

But it wasn't until the Forties that Soviet geologists observed the local custom of gathering coal by hand and guessed that there might be substantial reserves.

By the late Eighties, the mine was producing 98 per cent of Uzbekistan's coal - albeit of the coarse, polluting brown variety. Even today, two coal-fired power stations here generate 27 per cent of Uzbekistan's electricity. In the Soviet period, they powered other plants in the area producing a range of items ranging from rubber to gold and the rare metal Germanium.

Angren itself grew from a small town to a city of 135,000, drawing a workforce from all across the USSR so that it came to embody the socialist ideal of all different ethnic groups living and working together.

The dream fell apart after the Soviet Union fell apart in 1991, links between the different republics were disrupted and industrial production went into decline. Angren's factories and mines were plundered of their machinery which was sold off for a pittance.

As the jobs disappeared, life began to get more difficult every day.

Today, the brightly-painted, multi-storey apartment blocks by the highway are largely empty and derelict, their windows smashed.

"In the past, you'd have to wait in line for years to get an apartment in Angren," said the head of one "mahalla" or local community committee responsible for one of these blocks. "Nowadays people are sometimes unable to sell their apartments for several years, and the prices keep on falling. A two-room apartment in the city centre will cost 1,000 [US] dollars at most, and on average a two-room apartment costs 300 or 400 dollars.

"People are trying to get out, just as they once tried to move here. In a city where most of the population was employed at industrial enterprises, not a single plant works at full capacity today. As a result unemployment is high and a the standard of living low."

There are still some jobs at the coal mine, and they even pay what for Uzbekistan counts as a very respectable monthly wage of 100-150,000 sums, or 85 US dollars. But there are few new workplaces as production has declined in part because of lack of investment, and in part because demand fell away as the big factories stopped needing power.

Overall, the signs of chronic unemployment are everywhere, which in this most industrial of cities calls into question the government's relentless optimism about the state of the economy. At a February 10 cabinet meeting on last year's economic performance, President Islam Karimov said industrial production in 2005 grew by 7.3 per cent on the previous year.

At the main city market, dozens of people are hanging around at an informal "labour exchange" where anyone needing a casual labourer or "mardikar" can come and hire one for a day, or even less.

Many of them have come from the Fergana valley, where income levels are even lower.

"We could work as hired labour in Tashkent, where they pay a lot more, but the police there constantly drive us away. You need to be careful here as well, but it's still not as difficult as in Tashkent," said one of the markidars, who had from the Fergana city of Kokand.

Another man looking for work said as he slowly chewed on a piece of bread, "You can make 3-4,000 sums [2.50-3.50 dollars] a day, depending on what work it is and whether there's any work at all. In the afternoon, the chances of getting half a day's work go up. By this time many mardikars who haven't been able to find some work are drowning their sorrows in vodka – and employers prefer to their workers sober."

Judging by the number of kiosks selling wines and spirits at the market, the alcohol trade is one of the few businesses doing well. The traders say their customers go for the cheapest, low-quality brands of vodka and wine.

The Angren bazaar is still the liveliest place in town. Around the edges of the food market, other people are scraping a living by selling off odds and ends from their homes, their wares spread out on the ground. One of them suggested that the city authorities was delaying building a proper indoor market for goods because if it did, "Everyone who is now employed by a loss-making enterprises and who does not receive a salary will rush to [trade at] the bazaar."

Coupled with alcohol abuse, poverty is contributing to rising crime.

"I think that as long as there's a high unemployment rate, the crime problem won't be solved," said the mahalla committee head. "There are incidents daily. The commission that deals with minors recently examined the case of a 13-year-old boy who'd tried to steal two kilograms of macaroni at the market. And that's a commonplace case."

Children in the Angren area have had to grow up fast and find ways and means of making some money to help their families get by. Even in the cold winter weather, there are kids standing all along the main road through Angren, waving wet rags at passing cars to flag them down. For 800 sums - about 70 US cents - they will wash off the dirt cars have picked up coming over the Kamchik pass from the Fergana valley.

"Cold water is not a problem," says a boy who looks underdressed for this weather and has just completed a wash. "The biggest problem is the grown-ups who drive us away from the best spots. In the past, it was only children cleaning cars on the road, but now there are more and more adults every day. To earn money for bread and vodka, they simply drive us away."

Coal is another source of income for both children and adults, as local people revert to pre-industrial ways. Some illicitly gather coal at the opencast mine, while others pick up whatever falls onto the track from railway wagons trundling towards the station.

They hire donkeys for one sack of coal a day to bring their booty to the highway, and sell it for 1,500 to 2,000 sums - less than two dollars – a sack. Usually the parents do the selling while their children gather and transport the coal, because they are less likely to be punished if caught by mine security guards.

"Our children have been gathering and selling coal for two years," said a resident of Jigaristan, just south of the coalmine. "Of course, we would like them. to go to school and do their homework, but if they did, our families would have a hard time."

One 14-year-old has already got his business plan for the future laid out. Walking briskly through the snow, he rubs hands black with dust to keep them from the bitter mountain wind as he says, "If I can save some money, I'll buy myself a donkey first of all. Then I won't have to drag that extra sack to the road for the donkey's owner. Then I'll earn a lot more money."

(Names of interviewees have been withheld out of concern for their security.)

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