Uzbekistan ramping up gold production at Navoi & Almalyk to over 5 Moz/y by 2026

Often forgotten on lists of major gold mining enterprises as they are state-owned by Uzbekistan, Navoi Mining and Metallurgical Combine (NMMC) and Almalyk Mining and Metallurgical Complex (Almalyk MMC) are set to see their joint production exceed 5 Moz a year by 2026, an unprecedented figure, with Almalyk’s copper production also to reach 400,000 t/y.

NMMC’s production at Muruntau and some other more minor operations is typically well over 2 Moz/y so it is already the largest single gold mine in the world by some distance – well ahead of Grasberg, Lihir and others. IM visited Muruntau in 2016 and saw the unique 37 degree angle, 3 km high angle conveyor at the mine. Almalyk produces gold from its surface Angren mine and underground Chadak and Kauldy mines, with copper produced at the Kalmakir open pit and the Khandiza underground mine.

The news was covered in a release on the official website for Uzbekistan President Shavkat Mirziyoyev. It states: “On May 26, a Presidential decree was adopted to expand the production of non-ferrous and precious metals at the Almalyk Mining and Metallurgical Combine. According to the document, the construction of copper processing plants and metallurgical complexes will allow to triple the production of copper and gold, and increase the production of copper, gold and silver to 400,000, 50 and 270 t, respectively.” Almalyk MMC accounts for around 20% of the country’s gold production and 90% of its silver production.

Earlier this year, in February 2020, Uzbekistan unveiled plans to modernise NMMC by increasing its gold production annual capacity to 94 t (over 3 Moz) by 2026. Uzbekistan exported over $1 billion worth of gold in the first quarter of 2020, according to the country’s state statistics committee.

NMMC is the country’s largest industrial enterprise. It produces mainly gold and uranium and the Muruntau mill accounts for 10% of all industrial production in Uzbekistan and 18% of budget revenues. The company employs more than 54,000 people. By the volume of raw materials, it is the third gold producer in the world. However, the value of its assets is much less than similar companies abroad. Thus, at present, the book value of NMMC is estimated at $1.3 billion, while the market price of comparable foreign enterprises is $11 billion.

In this regard, the complex is projected to be transformed into a modern company. The state is taking comprehensive measures in this direction. In particular, under steady implementation is the Development Program of the Navoi Mining and Metallurgical Plant through to 2026. As part of the scheme, eight facilities worth $1.2 billion were commissioned in the period between 2017 and 2019. As a result, over the past three years, gold production has already grown by 2.5% and silver – by 37%.

President Shavkat Mirziyoyev has noted the need, along with the realisation of new investment projects in Navoi and Almalyk Mining and Metallurgical Plants as well as other large enterprises, to turn them into full-fledged participants in the international financial market.

This move at NMMC means executing 40 projects worth $4 billion, including the development of a new mining field with estimated value at $525 million. The current gold reserves of NMMC in the amount of 3,700 t are to be evaluated on the basis of international standards and reflected on the balance sheet of the enterprise. The State Committee on Geology and the Ministry of Finance have been tasked with translating the assessment of reserves and financial statements to international standards. Reports on field reserves and their condition, data on production projects are to be prepared in accordance with the JORC Code.