Mining Rush and Dynamics in Central Asia and Players : Is responsible mining possible?

Kazakhstan
Eurasian Natural Resources Company, ENRC, the miner that entered the FTSE 100 , was in talks to buy its domestic rival Kazakhmys in a deal that would bring together Kazakhstan's two largest companies and create a central Asia mining giant. ENRC was forced by the Takeover Panel to issue a statement yesterday saying that it has held "informal dialogue" with Kazakhmys, one of the world's largest copper producers. It added that "no formal proposal has been made by ENRC and there can be no certainty that a formal proposal would be made". The announcement sent Kazakhmys shares to an all-time high, ending the day up 16 per cent at 1,780p, valuing it at £8.1bn.
The news brought out into the open a combination that has been a favourite topic of traders and is likely to be determined by hard-nosed negotiations between the handful of men that control the two companies. Nearly half of ENRC is owned by three billionaire oligarchs,Alexander Mashkevich, Alizhan Ibrahimov and Patokh Chodiyev, who each own a 14.6 per cent stake. Vladimir Kim, the billionaire chairman of Kazakhmys, owns just under 50 per cent of that company.
Adding a further wrinkle is the role that the Kazakh government would play in the talks. It owns 20 per cent of ENRC and it is thought to be keen amid the global mining consolidation frenzy to see the creation of a national champion that could roll up other companies throughout central Asia. "The idea that there would be two listed Kazakh miners in London in five years always looked like it would be one company too many," said an analyst. "It looks like it's going to happen much quicker than that, but there is certainly going to be an element of politics involved."
Speculation has simmered since Mr Kim took a 14.6 per cent stake in ENRC in 2006. But since its December stock market float, ENRC shares have skyrocketed. When Mr Kim bought his ENRC stake, which he later transferred to Kazakhmys, it was worth $800m (£395m). Today, it is worth $4.4bn, more than five times as much. This is due in large part to major expected price rises for the price of chromium, which ENRC mines and is used to produce stainless steel.
Power shortages in South Africa, home to the world's largest reserves of the metal, mean that prices, set quarterly, are expected to jump by as much as 50 per cent.
Analysts think a deal could still be long way off. "There are good reasons for them to get together, but we think this is less likely in the short term," said Charles Cooper, an analyst at Evolution Securities. Kazakhmys is cheap relative to sector rivals, he added, which would make price a sticky issue, and the outcome is likely to be heavily dependent on the personalities involved.
Mr Kim, who has built Kazakhmys through a series of acquisitions over the last decade, is likely to want to continue in a lead role at any combined entity.
Armenia
Environmentalists campaigned fervently against plans to open a large tract of relatively untouched forest land to strip mining, only to watch the Armenian National Assembly approve the deal anyway. This spring, as the snows in the mountainous north began to melt and work started at the Teghut mine, a coalition of conservation groups renewed their push to have the government reconsider the approval of what they contend will cause irreversible damage to the nation's dwindling forestland.
More accustomed to setbacks than progress in dealing with political leaders in Yerevan, environmentalists got a shock when the country's new prime minister, Tigran Sargsyan, not only agreed to discuss their concerns, but seemed to cozy up to their arguments.
"We can't damage nature, because it'll cost our state and the people much more to repay," Sargsyan told a group of conservationists on 20 June. "And clearly, we need to take that into account from the very beginning and make balanced decisions. We need not be seduced by industry's statistics alone, but realize the importance of providing a proper living environment for people."
Environmentalists hailed as unprecedented the prime minister's decision to meet face-to-face and to openly discuss the government's controversial approval — even if the mining operations in northern Armenia's Teghut forest continue.
"This was the first serious meeting with a high-ranking official like the prime minister within the last 15 to 20 years," said Hakob Sanasaryan, chairman of the Greens' Union. "But the outcome of the meeting showed the discussion in fact was a formality. Maybe he will carry out serious reforms in other spheres, but not Teghut, I think."
Tatul Manaseryan, an economics professor at Yerevan State University and a former independent member of the National Assembly, believes the prime minister is trying to shake up the system and rattles off a long list of changes.
"The PM has started important reforms from his office: the work day starts at 9 a.m., the government sessions are as transparent as possible, he demands computer and other kinds of literacy from the ministers, organizes regularly scheduled meetings with citizens and actively responds to the questions raised, made a call for cooperation to the opposition and participated and spoke at the opposition congress, set a compulsory requirement for the ministries to work with non-governmental organizations, and so on," Manaseryan said.
Indeed, Sargsyan has been unafraid to criticize corruption, bribery, smuggling, and other problems — charges often made by monitoring organizations and citizens, but rarely from the mouths of senior politicians.
"The number one problem in the Republic of Armenia is not the problem of democracy, nor the lack of freedom of expression," Sargsyan recently told the National Assembly. "The number one problem is the corruption that hinders all our reforms. If we don't manage to create equal conditions of competition for economic entities, there won't be any democracy in Armenia. That is the basis and corruption is our number one enemy."