Balkar Ghost Town

The once booming industrial town of Tyrnyauz has fallen on hard times.

Sited on the largest known tungsten deposits in the former Soviet Union, Tyrnyauz was once Kabardino-Balkaria's economic showpiece. Now it is a ghost town.

But local industrialists are making a last-ditch effort to save Tyrnyauz from economic and social collapse - despite growing suspicion from the authorities in Nalchik.

In Soviet times, the town grew up around the tungsten mines which provided the USSR with 80 per cent of its supplies. But in the aftermath of perestroika, production dropped dramatically as the factory was gradually stripped of its assets.

The result was widespread unemployment as ancillary industries were hit by the slump and a sharp escalation in drug and alcohol abuse.

Then last year, to add insult to injury, the town was hit by a series of mudslides which cut a swathe of destruction through residential neighbourhoods as well as industrial compounds.

Attempts to reanimate the Tyrnyauz plant have been sidetracked by conflicting political agendas.

Local Balkar leaders say the Nalchik government - which is dominated by rival Kabardinian factions - has deliberately sabotaged their initiatives because it fears giving them economic independence.

The town has traditionally been seen as a potential rallying point for Balkar nationalists hoping to break away from the Kabardino-Balkarian republic and declare an independent state.

However, Tyrnyauz's only real hope of salvation comes from a small cabal of industrialists who are determined to regenerate the region, despite the simmering ethnic tensions.

Kuman Otarov, the director of the Tyrnyauz plant, is spearheading a package of measures aimed at breathing new life into the industrial complex.

"Unique for its time, our plant has been the pioneer of many new ideas," says Otarov. "The people of Tyrnyauz were the first to develop and implement new dressing technologies for tungsten ore which are unparalleled anywhere in the world.

"Today we are fighting for a government investment programme which will open up new horizons for the plant. Despite all the hard knocks, there is still a huge demand for tungsten both on the Russian and foreign markets. And there is no other plant in the world where tungsten can be produced in such large quantities."

Otarov went on to say that the plant's management had set up a scientific and technical council bringing together mining specialists, scientists and government inspectors.

The council would work to introduce a package of reforms aimed at increasing productivity and improving quality control. "We have drawn up a stabilisation programme for the Tyrnyauz plant," said Otarov. "The idea is to create a favourable environment for investment so that we can rebuild and reequip our facilities.

"We've managed to secure a 10-million rouble loan from Geolink and we've been able to pay off three months' wages to 1,500 mining engineers."

Otarov's plans are nothing if not ambitious. "We're currently discussing the possibility of issuing shares and raising 28 million roubles to tackle the most pressing problems such as new equipment, spare parts and materials," he said.

The plant is still heavily in debt to the Russian government as well as gas and electricity providers. But the director says, "Over the coming year, we plan to meet our target of producing 150 million roubles-worth of tungsten and estimate that we'll have overcome our current crisis by 2005."

Critics say that Otarov's goals are unrealistic and the plant requires a volume of investment many times greater than that envisaged by the industrialists. More importantly, it needs to secure lucrative foreign contracts and partnerships with international consortiums.

In the remote Caucasian hinterland, such possibilities seem incredibly remote.

Yuri Akbashev is a regular IWPR contributor