NGMK continues to develop its capacities

Tashkent, Uzbekistan (UzDaily.com) -- Analysts of “AFS-Research” investment company in their reports considering issues such as investment attractiveness and main factors of Uzbek economy development and impact of the global economic crisis on its condition and prospects. Information used in these reports was received from local and foreign periodicals and Internet, data of State Statistics Committee of Uzbekistan as well as from calculation and analysis of “AFS-Research” analysts.

Metallurgy is one of the largest industries of Uzbekistan. Main activities of Uzbek metallurgy enterprises are production of copper, uranium and gold mining. Dominating enterprises of the industry are Almalyk Mining and Metallurgy Combine (AGMK) and Navoi Mining and Metallurgy Combine (NGMK). The plant mines and processes raw materials and actively carries out investment projects, directed at expanding capacities.

NGMK is only uranium producer in Uzbekistan. The company unites three metallurgy plants – in Navoi (GMZ-1), in Zarafshan (GMZ-2) and in Uchkuduk (GMZ-3).

The company plans to commission seven new deposits, including five deposits, where exploration works are underway. In the first quarter 2010, NGMK launched two new hydraulic excavators Hitachi (Japan) of high capacity. New modern equipment will increase productivity at Muruntau mine. Development of Muruntau mine, one of the largest gold deposits in the world, has been started in 1967.

For last several years, the combine has been increasing the volume of ore processing and gold production. In line with the programme on perspective development gold producing industry up to 2010, NGMK is planning to increase gold output by 20% by this term. AFS-Research analysts believe that use of inclined conveyors at Navoi GMZ will allow to increase re mining from 28-29 million to 30-40 million tonnes. The conveyor is planning to reach design capacity in 2011.

NGMK is planning to direct US$229.7 million to modernization of existing and construction of new objects in 2010 against US$192.5 million in 2009. In line with NGMK investment programme for 2010, approved by the President Islam Karimov, the main volume of investment for US$211.7 million will be carried out due to own resources and other part for US$18 million will make up loans of Fund for Reconstruction and Development of Uzbekistan.

Within the investment programme, the company will direct US$134.5 million to construction of new objects and US$95.2 million to reconstruction of existing capacities. In particular, NGMK is planning to complete construction of the second line of gold mining complex on the base of Kokpatas and Daugyztau fields (Central Kyzylkum) with the cost of US$71.5 million. At the full designed capacity, the complex will process up to 2 million ores from Daugyztau field and produce 20 tonnes of gold annually. Till the end of 2010, the gold mining and processing complex on the base of Zarmitan gold ore zone will be constructed. In line with the programme on perspective development of gold mining industry of Uzbekistan till 2010, NGMK is planning to increase gold production by 26% compared to 2007.

For last several years, the combine produces 57-59 tonnes of gold, while total gold production in Uzbekistan will make up 86 tonnes. For the first time, the company announced its charter capital, which made up 980 billion soums (US$754 million) in late April 2010.

NGMK launched active phase of construction of the second line of gold mining and processing complex at Gujumsay deposit (Samarkand region) with the cost of US$126.2 million. The combine will invest US$66.8 million in 2010. The complex will be commissioned at the end of 2011. In early 2010, NGMK launched the first ling of gold mining and processing complex at Charmitan field (Samarkand region) with the cost of US$115 million.

Construction of Zarmitan gold mining and processing complex with the cost of US$300 million was started in 2007. The project envisaged utilization of Charmitan, Gujumsay and Promejutochnoye deposit, as well as modernization of Mardjanbulak gold mining and processing plant with the capacity of 100 tonnes of gold a year.

This year, NGMK will continue to develop new three and continue to develop three existing uranium fields with total investments of US$20 million.

Within modernization of existing capacities, NGMK is planning to reconstruct Muruntay field and expand mining and processing capacities. The company is construction only steeply inclined conveyor with 270 meters in length. The company fully implemented “Complex of measures on decreasing prime cost of products in 2010” in the first half. The prime cost decreased by 3.2 billion soums.

The used capital investments of NGMK on Zarmitan gold ore zone objects made up 167% in the reporting period. The used capital investments due to own resources on other objects made up 289%. Construction of ore mining and processing at Zarmitan field was implemented by 214.7%, mining-capital works – for 9 billion soums.

In June 2010, ore department No. 5 of NGM commissioned local sorption facility (LSU-2) at geologic deposit No. 6. The company currently realizes programme on modernization, technical and technological re-equipment of uranium processing industry of Uzbekistan for 2007-2012, which envisages increasing uranium production twice.

The Ore Department is continuing construction-assembly works at Northern Istiqlol field. The power line with the capacity of 35 kilovolt with sub-station, automobile road, and LSU were constructed. This will significantly decrease schedule on launch of technological blocks. Zarafshan Construction Department of NGMK launched construction works of LSU-3 at geological deposit No. 2.

Currently, land woks on building technologic precipitation tank, road and industrial area are underway. Launch of new objects will allow to increase mineral-resource base of technological mine No. 2.

At geotechnical ore No. 3 at Beshkak field, metal constructions and LSU were transferred from No. 11 to carry out exploitation of area No. 12.

Zarafshan construction department will commission the first block of mining and metallurgy plant (GMZ-4) of Zarmitan ore mining and processing complex. The construction is carried out Zarkent village of Samarkand region. First block of GMZ-4 consists of double-helical classifiers, conveyor and facility of intensive gravitation. In the end of March 2010, several infrastructure objects at Gujumsay field were commission. The second phase of ore mining and processing complex construction on Zarmitan gold ore zone at Gujumsay rated for US$126 million. All NGMK objects will be constructed in 2011. About US$73 million is planned to utilize within reconstruction works up to 2011.

Important direction of work for Zarafshan construction department is building of ore separation complex at Kokpatas field of Northern Ore Department. It is planned that the complex will be commissioned in 2010 and the construction works rated at US$71 million. Zarafshan builders are also planning to construct Zarafshan-Uchkuduk gas pipeline by 1 September 2010.

“AFS-Research” analysts believe that successful functioning of Uzbek metallurgy is an important factor of economy development because it provides diversification, creates new jobs and increases export potential of the country.

AFS–Research is investment company, providing wide-scale services for work in capital market. Main directions of activity are investment analytics, investment-banking services and investing consulting. Company web-site: www.afs-research.com.