DUSHANBE, March 19, 2014, Asia-Plus – The Tajik Aluminum Company (TALCO), which operates the Tajik aluminum smelter, denies reports that it is facing financial collapse.

A statement released by TALCO on March 19 notes that the report by the Ministry of Finance (MoF) that the company is allegedly on the verge of bankruptcy is absolutely baseless.

The MoF report “On the Activities and Financial State of State-run Large Enterprises,” in particular, notes that over the first nine months of 2013, the coefficient of bankruptcy of TALCO has reached 0.9 that is evidence of the fact that the company is on the verge of bankruptcy.

Igor Sattarov, a spokesman for TALCO, says that this assertion is absolutely unfounded, “because it is based on TALCO’s net book value (1.5 billion somoni) while in accordance with international financial reporting standards such calculations should be done on the basis of market value (930 million USD).”

“According to international practice, such calculations presuppose preparation of consolidated financial reporting on the basis of the principle of continuity of the activity of an enterprise.  TALCO is the only company in Tajikistan that has international audit report made by American Appraisal Inc. (USA),” Sattarov noted.

“It follows from this audit report that the overall value of restoration/replacement of the fixed assets amounts to 3.15 billion USD and after deduction of physical depreciation the actual cash value of the fixed assets of TALCO amounts to 930 million USD,” said Sattarov.  “Besides, the company’s structure of expenses meets international standards.  Moreover, positive changes are expected in the world aluminum market in the future that will allow improving TALCO’s financial state.  The company also receives permanent support from its owner – the Government of Tajikistan.”

Tajikistan is Central Asia’s biggest producer of primary aluminum. Tajikistan reportedly relies heavily on the smelter''s earnings.

The aluminum plant, run by the Tajik Aluminum Company (TALCO), was launched in late March 1975.  It is one of the ten largest aluminum smelters in the world and provides more than 70% of the country’s foreign currency earnings, consuming 40% of the country’s electrical power.  Tajikistan does not mine alumina but imports the raw material through tolling arrangements.