Iran to build cement plant in southern Krygyzstan

Iran to build cement plant in southern Krygyzstan
Published: 27 June 2008

Iran has announced plans to build a cement factory in Tash-Kumyr, in the south of Kyrgyzstan. This will be the third building materials factory in that region.

Kyrgyzstan’s Ambassador to Iran, Medetkan Sherimkulov, presented the project. He said that the construction of a new industrial enterprise in the south of the country will help solve a number of social and economic problems of this densely populated region. Iranian investors promise to create 4,000 jobs in the region, thus reducing the exodus of local workers to the countrys north and Bishkek in search of jobs. He predicted that the new cement factory will increase the countrys GDP by 2 percent.

The Iranian side plans an investment of about 150 million euros (US$236 million) to launch one of the planned three production lines. The total cost of the project will be 400 million euros.

However, the Iranian investor has one precondition -- they want to take part in a tender for the development of Tegene coal mine, located 30 km from Tash-Kumyr. If the Iranian investor wins the tender, they will build the cement factory.

According to Sherimkulov, the Iranian investor is ready to invest 50 million euros in the coalmine. The Iranian side said they were interested in the coal mine because they need energy resources to operate the cement factory.

The Iranians refer to the example of the cement factory in Kant (in northern Kyrgyzstan), which uses Uzbek natural gas, Kazakh raw material, and local labor. They plan to follow the same scheme but they want to avoid dependence from outside energy supplies. This would make the new factorys output more cost-effective than that of their competitors. The new factorys production capacity will be 1.5 million tons of cement a year.

Construction of a coal mine at Tegene field was stopped in the 1990s due to a lack of financing. According to experts, the fields reserves are 51 million tons of coal. If the Iranians win the tender, they said they will start work at the end of this year.

In 2006, a Chinese company tried to start construction of a cement factory in Tash-Kumyr, but the Kyrgyz government didnt approve of its methods. According to Kyrgyz officials, the technology suggested by the Chinese company didnt correspond to international standards and negatively affected the environment.

Today, the major cement producer in Kyrgyzstan is the Kant cement factory, which exports most of its output to Kazakhstan. Two cement factories – in Kyzylkiya and Aravan – are currently under construction.