MINEX Forum

Tag: Almalyk Mining and Metallurgical Combine

  • Uzbekistan’s New Copper Smelting Complex Completion Plans confirmed

    Uzbekistan’s New Copper Smelting Complex Completion Plans confirmed

    Uzbekistan has outlined the planned completion date for the construction of a new copper smelting complex at the Almalyk Mining and Metallurgical Combine (AGMK). According to Abdullah Khursanov, the chairman of the AGMK board, the project aims to expand the existing capacity for producing cathode copper from 148,000 tons to 300,000 tons.

    The new complex, located on the site of the existing facility, will include several key components: a metallurgical workshop, a sulfuric acid workshop, an oxygen block, a slag-enrichment plant, a concentrate storage and feed preparation facility, a copper electrolysis workshop, and a system for electrical supply to the new plant, as well as supporting infrastructure.

    Khursanov noted that contractors have already been identified for the metallurgical and sulfuric acid workshops, the oxygen block, and the internal electrical supply systems. Contracts have been signed and financing has been secured for these aspects of the project.

    The project is being implemented with significant financial support from KfW IPEX Bank and AKA Bank. KfW IPEX Bank is acting as the financing organizer, including the creation of a bank syndicate, which facilitates effective coordination of international cooperation.

    Previously, AGMK signed an agreement with German banks KfW IPEX and AKA to receive €146 million as the first tranche for financing the construction of the new copper smelting complex in Uzbekistan.

  • B2Gold’s Investment Hopes in Uzbekistan Dashed after Six-Year Search

    B2Gold’s Investment Hopes in Uzbekistan Dashed after Six-Year Search

    According to the World Gold Council, Uzbekistan ranked 10th in the world in terms of gold production (110.8 tons) in 2023.

    According to the World Gold Council, Uzbekistan ranked 10th in the world in terms of gold production (110.8 tons) in 2023.

    Industry sources suggest that Canadian gold mining company B2Gold is preparing to change its investment strategy in Uzbekistan. While the specific reasons remain unclear, the decision may be linked to the challenges of operating within the country’s state-controlled mining industry.

    The company first announced its investment plans during the round table of the MINEX Uzbekistan Forum, held in Tashkent on 17 May 2017. According to the Foreign Investment Promotion Agency, B2Gold entered the market in 2018. In 2019, B2Gold invested $2.18 million in projects in Uzbekistan, and in 2020, more than $3 million. In July 2023, Reuters reported that B2Gold Corp was considering additional opportunities to acquire gold assets to accelerate growth. The company’s CEO, Clive Johnson, said the company was looking at assets that are already operating, not those that are in development.  Since B2Gold’s projects in Uzbekistan are at an early stage, this may have been the main reason for the company’s management to close the branch in Tashkent to concentrate on consolidating production assets with smaller producers in other countries of the world. In addition to Canada, where B2Gold acquired the Sabina Gold deposit in April 2023 for C$1.1 billion (US$832.1 million), the company is engaged in gold mining in Mali, Namibia and the Philippines.

    Uzbekistan has an ambitious goal of doubling its economy by 2030.

    This growth is reflected in the increasing role of national enterprises. Over the past six years, their share within the overall industry has grown from 10% to 17%, and their contribution to budget revenues has increased from 11% to 25%.  In 2023 Uzbekistan has laid out bold targets for its mining sector within its 2030 Development Strategy. The nation aims to explore 60,000 km of potentially mineral-rich areas by 2024.

    Key production goals (47 and 48) include:

    • Increasing copper production by 3.5 times to fuel high-value manufacturing.
    • Increasing gold production by 1.5 times.
    • Tripling silver production.
    • Tripling uranium production.

    To support downstream industries, Uzbekistan plans to boost copper processing capacity within the electrical sector by 300 thousand tons. Additionally, the nation is seeking $1.5 billion in investment to localize the production of household appliances.

    Uzbekistan’s strategy emphasises the adoption of international standards for assessing its mineral reserves, ensuring transparency and alignment with global best practices.

    On November 6, 2023, Minister of Mining and Geology Bobir Islamov announced the development of a new subsoil law.  This law aims to attract foreign investment by improving the legal framework for mining operations, providing transparent regulations, and reducing tax rates. Islamov emphasized that Uzbekistan spends $230 million annually on geological exploration and that the new law, developed in partnership with international consultants, will clearly outline opportunities for investors. As a positive result of these efforts, companies like the French Orano Mining and Canadian juniors, such as B2Gold, have begun investing in Uzbekistan’s mining industry.

    On November 6, 2023, Minister of Mining and Geology Bobir Islamov announced the development of a new law on subsoil use. He emphasized the need to accelerate geological exploration, an area where Uzbekistan spends roughly $230 million annually.  “In order to attract investors, of course, we need a very good legal framework – transparent and stable. To do this, together with consultants from the European Bank for Reconstruction and Development, with the involvement of international consultants from the Boston Consulting Group, we have developed a new law on subsoil use that provides direct action in order to clearly delineate and show all the opportunities for investors, their obligations, and, most importantly, the order of the game,” he said. Islamov specifically noted that tax rates for using subsoil were reduced, including a reduction from 10% to 7% on gold and copper, and from 10% to 2.7% on tungsten. These changes have helped attract companies like the French Orano Mining and Canadian juniors, including B2Gold, to invest in Uzbekistan’s mining industry.

    On January 15, 2024, President Shavkat Mirziyoyev reviewed progress and future plans for the geological sector, a strategic area for Uzbekistan’s growing economy. The country has committed significant resources, allocating around 1 trillion soums per year (about $80 million), resulting in the exploration of 31,000 square kilometres.  This investment focus has attracted $1.7 billion in investment projects to the industry.

    Two weeks later, on 1 February 2024, President Shavkat Mirziyoyev reviewed development plans for Uzbekistan’s metallurgical sector. The extraction of gold and other solid minerals is centralised under four state-owned enterprises: the Navoi Mining and Metallurgical Combine, the Almalyk Mining and Metallurgical Combine, the Uzbek Metallurgical Combine, and the Navoiuran State Enterprise. These enterprises have received significant investment in recent years, totalling $7.4 billion.

    On 14 February 2024, the Uzbek government released its state investment strategy for 1Q2024. 17 mining projects with foreign investors feature, mainly Chinese and Turkish. The total value of foreign mining projects is $3.6 billion of which $1.6 billion is financing from a Gulf consortium made up of Vision Invest (Saudi), Qatar Mining and ADQ (UAE) which appears to be financing for the Yangi Kon lithium venture.

    It is hard to forecast how the market will react to the possible exit or decrease in investment from the only foreign investor in Uzbekistan’s gold mining sector. This uncertainty is heightened by past experiences, such as Newmont (the world’s largest gold mining company) leaving the country in 2006 due to unfounded tax claims by the Uzbek government.

    The mining targets (goal 48), as per Uzbekistan 2030 Strategy, is to explore 60,000km of sites with commercial potential in 2024. Uzbekistan’s mining development plans and strategies will be presented at the National Mining and Metallurgy Company (NGMK) booth #2744 at the PDAC convention in Toronto from 3-6 March 2024. The Uzbek delegation will be represented by leading specialists and heads of companies and government organizations, including The Ministry of Mining and Geology, Department of Strategic Development and Investments, Department of Energy Resources Development, Department of International Cooperation and Investment Attraction, Almalyk Mining and Metallurgical Combine, Navoi Mining and Metallurgical Combine and Navoiuranium.

    The 10th Mining and Exploration Forum MINEX Central Asia will be held in Bishkek on 18-20 June 2024. The Forum will provide an international platform for assessing the investment potential of the countries of the region and discussing strategies for attracting foreign investors to explore promising deposits of critical ores and metals in Central Asia, including Uzbekistan.

  • AGMK continues to storm the foreign market with its products

    AGMK continues to storm the foreign market with its products

    According to the information service of the Almalyk Mining and Metallurgical Combine, for 10 months of this year, products were exported for a total amount of 557,230,000 US dollars, the forecast was fulfilled by 102.1%.

    47,057 tons of copper products (+6%), 36,573 tons of zinc products (+2.7%) were exported.

    The forecast indicators for the export of rhenium, cadmium, copper sulfate, palladium powder, molybdenum products, lead concentrate, selenium and tellurium were also met.

    Today, AGMK exports more than 20 types of products to more than 20 countries.

    The plant’s products are exported mainly to countries such as Turkey, the Russian Federation, Belarus, Kazakhstan, Bulgaria, Azerbaijan, Kyrgyzstan, Ukraine, Poland, Tajikistan, Indonesia, the Netherlands, China, Turkmenistan, Afghanistan.

    Products are also supplied to new markets: Suriname, Kenya, Australia, Lithuania, Georgia, Portugal, Canada, Austria, Spain, Finland, Morocco and Singapore, the information says.

  • AMMC received a patent for an invention in the field of nanotechnology for the first time

    AMMC received a patent for an invention in the field of nanotechnology for the first time

    Scientists and specialists of the Almalyk Mining and Metallurgical Combine became the owners of another patent for an invention – a method for producing tungsten nanopowder for adding to hard alloys.

    This method is used in powder metallurgy and in the production of nanopowders. The use of this technology will increase the strength of alloys by 16%.

    In hard alloys, strength is a critical parameter. The new technology prevents the destruction of the alloy under load (pressure). Nanopowders are used to activate the recrystallization process of hard alloys.

    Today, this method, the patent for which is fully owned by AGMK, is used in the production of hard alloys in the structural division of AGMK, located in Chirchik.

  • NGMK Revises Profit Forecast and Implements “Strict Economy Mode” Following Government Directive

    NGMK Revises Profit Forecast and Implements “Strict Economy Mode” Following Government Directive

    On October 14, 2023, the Supervisory Board of Navoi Mining and Metallurgical Combine, Uzbekistan’s largest enterprise, discussed various matters concerning NGMK’s operations, including a forecasted decline in profits for 2023. Although the board meeting took place on April 8, the news about it surfaced this month. Financial expert Otabek Bakirov was the first to draw attention to it. The Supervisory Board consists of Deputy Prime Minister and Minister of Economy and Finance Jamshid Kuchkarov, First Deputy Advisor to the President on Industry Development, Investment, and Implementation of Foreign Trade Policy Timur Ishmetov, Advisor to the President on Socio-Political Development Ruslanbek Davletov, Director of the Agency for Management of State Assets Akmalkhon Ortikov, and Deputy Minister of Energy Akmal Zhumanazarov.

    The board meeting included a business plan for the company for 2023, which anticipates an increase in revenue from 56.6 trillion to 59.7 trillion soms. However, the plan also forecasts a decrease in net profit to 9 trillion soms ($735 million), which is nearly 6.4 trillion soms lower than in 2022 (15.39 trillion soms), as well as lower than the figures for 2021 (11.3 trillion soms) and 2020 (10 trillion soms).

    Expenses are planned at 39.9 trillion soms, including production expenses of 27.5 trillion soms. It is expected that compared to the previous year, revenue from product sales will increase by 3.1 trillion soms, reaching 59.7 trillion soms (+5.4%), while dividends paid to the government will decrease from 15.3 trillion to 7.8 trillion soms, and tax payments will decrease from 18 trillion to 17.2 trillion soms. Members of the supervisory board noted a sharp increase in expenses compared to 2022 and the cost of gold production, which is expected to lead to a decrease in net profit. Nevertheless, the board provisionally approved the business plan and tasked NGMK’s management with developing measures to optimize expenses for this year and submitting a revised business plan within two weeks. “Gazeta.uz” has sent a request to the Ministry of Economy and Finance regarding the updated business plan but has not yet received a response.

    Following the publication by financial expert Otabek Bakirov, NGMK’s press service announced that the business plan had been revised in collaboration with experts from the Ministry of Economy and Finance, taking into account gold prices on the global market, changes in the exchange rate of the som to the dollar, and a review of expenditure composition. According to the updated forecast, NGMK’s net profit in 2023 will amount to 14 trillion soms (instead of the previously projected 9 trillion soms). However, this is 1.3 trillion soms less than in 2022.

    Umidjon Kostaev, Head of the Budgeting and Controlling Department at NGMK, stated in an interview with “Gazeta.uz” that expenses are projected to increase from 28 trillion soms in 2022 to 32 trillion soms by the end of the year. Initially, the forecasted expenses in April were expected to reach 39.9 trillion soms, but they have been revised. “We calculated the expenses, coordinated them with the Cabinet of Ministers, and presented them to the supervisory board. After the business plan for 2023 is approved, it will be published on the website,” he said.

    Kostaev explained the projected 4 trillion soms increase in expenses by the rise in electricity tariffs (+25%) and gas tariffs (+38%), which he claimed are the largest expenditure items. Earlier, Minister of Energy Zhurabek Mirzamakhmudov informed “Gazeta.uz” that the energy resource tariffs for NGMK and Almalyk Mining and Metallurgical Combine (AGMK) had been increased in accordance with a government resolution, meaning these enterprises have been paying higher rates since April 2022.

    Furthermore, starting from October 1st, “Navoiyazot” has increased the price of chemical reagents, necessary for gold production, by 40%. According to Umidjon Kostaev, the changes in profit forecast, from 9 trillion to 14 trillion Uzbekistani som, were attributed to the implementation of a “strict cost-saving regime.”

    Kostaev explained that they have improved procurement processes by ordering essential goods and materials. They have also closely monitored material expenses for each process and instructed specialists to critically review and develop measures to reduce their volumes.

    The Head of Budgeting and Controlling Department also mentioned that repair works have been postponed. These measures have allowed for a significant reduction in expenses, he added.

    As a result, NGMK expects to generate an income of 64 trillion som by the end of 2023, compared to the previous forecast of 59.7 trillion som in April. Kostaev attributed this change to fluctuations in gold prices.

    The updated forecast indicates that dividend payments to the government will range from 11 to 13 trillion som, while tax payments are expected to reach 20 trillion som, compared to the earlier projection of 7.8 trillion som for dividends and 17.2 trillion som for taxes.

    Regarding the production cost of gold, Kostaev emphasized that NGMK has the lowest cost worldwide. The cost of producing one ounce of gold is $778, which is the lowest among the top 10 gold-producing companies, as highlighted by NGMK.

    However, Kostaev acknowledged the objective reasons behind the increase in production costs.

    It is worth noting that NGMK is the largest enterprise in Uzbekistan, responsible for nearly 15% of the state budget’s revenue (its share was 17.82% in 2022 and 20.1% in 2020).

    The representative of NGMK mentioned that the composition of the supervisory board has changed, and there have been no meetings involving its members since April 8th.

  • AGMK: results of production activities for the 9 months of 2023

    AGMK: results of production activities for the 9 months of 2023

    I am pleased to announce that the dedicated team of the Almalyk Mining and Metallurgical Combine has achieved remarkable success in meeting all production targets for the first nine months of this year.

    The production of goods, valued at current prices, has reached an impressive sum of 22,908,419,580,000 Uzbekistani soms, surpassing the set target by 103.1%.

    During this period, the “Kalmakyr” ore management division has achieved a mining indicator of 101.3%, with a growth rate of 104.5%. The processing of copper raw materials has been carried out at an impressive rate of 100.5%, with a growth rate of 106.2%.

    In September, the production of cathode copper reached 100.0%, and the growth rate for the production of cathode copper from our own raw materials over the nine months amounted to an impressive 102.2%. Additionally, we have successfully produced metallic zinc from our own raw materials at a rate of 101.6%.

    The extraction and processing of polymetallic ore have also been commendable, with a completion rate of 104.8% (with a growth rate of 103.5%) and 103.9% (with a growth rate of 101.6%), respectively.

    Our gold miners have excelled in fulfilling their obligations, ensuring the achievement of the forecast for the extraction of gold-bearing ore (102.8%) and its processing (103.1%).

    These impressive accomplishments can be attributed to the dedication and expertise of our esteemed structural units, including the “Kalmakyr” ore management, the copper enrichment plant, the copper enrichment plant No. 2, the “Khandiza” ore management, the Angren ore management, the Chadak ore management, the “Kauldy” mine, and the zinc and copper smelters.

    Furthermore, we have successfully completed tasks related to the production of copper vitriol, enamel wire, technical selenium, technical tellurium, palladium powder, molybdenum trioxide, and ammonium perranate.

    I commend the entire team for their hard work and commitment to excellence. We look forward to continued success as we strive to maintain our position as a leader in the mining and metallurgical industry.

  • Uzbekistan’s Almalyk exports $465 million worth of products in January-August 2023

    Uzbekistan’s Almalyk exports $465 million worth of products in January-August 2023

    In January-August, Almalyk Mining and Processing Works exported products valued at $465.43 million, up by 0.4% from the forecast.

    In terms of products, 30,012 tons of copper and 17,549 tons of lead products were exported. 446 tons of molybdenum products were exported, the fulfilment of the forecast indicator in this direction amounted to 132.8%.

    Rhenium, copper sulphate, palladium powder, lead concentrate were also delivered to foreign consumers.

    Last year, the geography of exports expanded. Thus, new markets – Spain, Austria, Germany, Finland, Canada, the Republic of South Africa and Senegal were supplied with products worth 14.3 million US Dollars.

  • The Scientific and Production Association for Rare Metals and Hard Alloys, a part of AGMK, has achieved an early fulfillment of the annual forecast

    The Scientific and Production Association for Rare Metals and Hard Alloys, a part of AGMK, has achieved an early fulfillment of the annual forecast

    Scientific and Production Association for Rare Metals and Hard Alloys (NPO PRMiTS), a division of Almalyk Mining and Metallurgical Combine, has achieved an early fulfillment of the projected target for the year 2023 on the eve of the 32nd anniversary of Uzbekistan independence.

    In the current year, the labor collective of NPO PRMiTS was tasked with producing industrial products worth 382.3 billion Uzbekistani soms. As of today, industrial products worth 396.0 billion Uzbekistani soms have been actually produced.

    For reference: This structural unit of Almalyk Mining and Metallurgical Combine is located in the city of Chirchik. The enterprise produces tungsten and molybdenum products in the form of oxides, powders, ingots, and briquettes for alloying cast iron and steel. It also produces high-value-added products such as wires of various cross-sections, molybdenum round and flat bars, refractory metal alloys, single crystals of tungsten, molybdenum, and rhenium obtained through powder metallurgy. Additionally, thanks to research and exploration by the association’s specialists, new types of products have been developed. The Uzbek-Korean Scientific and Technological Center operates under the NPO as well.

    It is worth noting separately that this enterprise concluded the first half of the current year with a net profit of 193.7 billion Uzbekistani soms.

  • The delegation headed by the Minister of Export of Great Britain visited AMMK

    The delegation headed by the Minister of Export of Great Britain visited AMMK

    A delegation headed by Parliamentary Deputy Secretary of State of Great Britain, Minister of Export Malcolm Offord arrived at Almalyk Mining and Metallurgical Combine JSC of the Ministry of Mining and Geology of the Republic of Uzbekistan.

    The delegation also included Ambassador Extraordinary and Plenipotentiary of Great Britain to Uzbekistan Timothy Smart, responsible persons in the field of trade and investment, as well as representatives of a number of leading companies.

    The guests visited the observation decks of the Kalmakyr mine and the Yeshlik I deposit, the directorate of the copper concentrator-3 under construction. During the meeting with the management held in the executive office, the parties discussed the issue of establishing cooperation.

    Also, during the event, representatives of companies such as “Weir Minerals” and “United Concrete Canvas” made a presentation about the activities of their enterprises.