Page 35 - bne magazine November 2021_20211104 uzbekistan risding

bne November 2021 Cover story I 35
streets, populated by mainly Russians and Ukrainians that knew the mining business well from their homelands.
The US company Newmont had opened a gold processing plant that was working the thousands of tonnes of tailings from decades of Soviet gold mining that were still rich with the yellow ore in a simple process to turn the rocks into gold.
A fortified shed next to the plant was stacked from floor to ceiling with bars of gold.
Today the mine is flourishing. Newmont is long gone following
a dispute with Karimov over tax payments, but the mine is still working the tailings, but is expanding its open-cast operations and is on track to increase output by 30% in the next five years. However, the main event will be its 100% privatisation, where shares will be sold on the open market. The gold mine will be ready to be privatised from January 1, its ebullient director told bne IntelliNews.
“We are 90% ready!” chief engineer Nikolai Snitka told bne IntelliNews in
an interview. “It could happen from January 1. The company has been restructured and transformed into a joint stock company [JSC]. International
consultants like McKinsey are currently auditing the assets. We want to be transparent and have everything to international standard!”
Currently international consultants McKinsey are auditing the assets and valuing the works, but the corporate restructuring has already been completed and the sale of the company is awaiting a government decision.
NavoiAzot has been investing in several new product lines and has
just launched the production of PVC plastics that have never been produced in Uzbekistan before. The demand
has been so great that the company has already launched a second project to more than double the production together with some Chinese investors. Previously the company borrowed money for its expansion, but business has been growing so fast that now the company is investing its own funds, borrowing using commercial credits
or inviting investors to participate.
The plant is of Soviet vintage, set up in 1977, and is the biggest cement maker in Central Asia. If construction is one
of the main drivers of economy growth, then the frenetic activity at the cement
plant is perhaps a good indicator of the changes in the Uzbek economy. The beaten huge silos of the original production stand at the back of the territory and continue to churn out some 3mn tonnes of cement a year entirely for the domestic market,
as domestic demand is currently outstripping domestic supply by 6mn tonnes, forcing Uzbekistan to import cement.
Qizilqumsement is investing $112mn
to add a fourth production line, the first significant investment made since 1986. The grounds of Qizilqumsement are littered with material and equipment as a new silo soars overhead and is already more than half completed.
The company is funding 81% of the investment from its retained earnings and the rest has been taken as commercial loans from Uzbek banks.
“In 1994 we had to close down
one of the three lines, as there was no demand,” says Abduqahhor Salomov, the general director of Qizilqumsement. “Today we can’t produce enough and even after the new line goes into action we will be working at full capacity. You can feel the difference in the country.”
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