Almalyk Mining & Metallurgical Complex on the Road to Transformation

Abdulla Azizov, Deputy Chairman of the Board of JSC “Almalyk MMC” presented Transformation at AMMC.

Almalyk Mining and Metallurgical Complex (AMMC) was established 70 years ago.  The company employs more than 35,000 people. In 2021 its revenue was $3 billion USD.

The company is producing over 100 manufactured products. AMMC’s non-gold export is 1.1 bln USD per annum.

AMMC produces over 90% of Uzbekistan’s copper or 148.500 tons per annum.  Additionally, the company annually produces 17 tons of gold, 196 tons of silver and 110 000 tons of zinc.

The company operates three open-pit and four underground mines. Underground mines are mainly used for gold production. Ores are processed at five plants and then shipped to metallurgical complexes.

About 39% of the revenue is coming from copper and 34% is coming from gold. Zinc makes 8% of the revenue.  19% of revenue comes from other products and commodities.

According to JORC estimates, AMMC has over 45 million tons of copper, over 5 thousand tons of gold, over 900 000 tons of molybdenum and 348 000 tons of silver.  Total resources are estimated at around 19.5 billion tons of ore in Kalmakyr and Yoshlik-1 open-pit mines, which could last for 350 years at the current production capacity.  The company is massively increasing its production capacity in next 6-8 years.

Current copper production of 148.500 tons will increase to 400,000 tons in 2028 and will reach 500,000 tons per annum by 2030.  Even at that production level, current resources will be enough for 110 years.

The company’s objective is to maintain low-cost production and to increase its profit. To achieve this goal, the company and the Government of Uzbekistan have created a portfolio of investment projects for 15 bln USD up to 2030.

Until recently the AMMC was heavily regulated by the government and all the data related to the company’s activity was not publicly available. This has changed and the company is now actively working with a number of international partners on the development of its mineral resource base and modernising and expanding its production.

At the Yoshlik – 1 investment project (11 bln USD) established in 2017, the company has already spent over 400 mln USD on purchasing mining equipment.  Since 2021 the company has begun EPC contracts for building a new copper processing plant. Current investment in Yoshlik – 1 project reached $1.9 bln USD.

AMMC has been building new electricity substations to meet the forecasted demand of 2 GW of electricity consumption by 2028. Solar plants or renewable energy are an imperative part of the expansion plan of electricity production. An international tender is currently open for companies wishing to participate in the development of renewable energy capacity.

AMMC has started the two-phase expansion of the metallurgical complex. The first phase of expansion will be finished by 2026 and the second phase by 2028.

Deliverables will increase from 148,000 to 400,000 tons of copper cathodes, gold production from 17 to 50 tons and silver from 161 to 270 tons per annum by 2028.

ESG considerations are the highest on the priority list in the company’s agenda.  AMMC is spending 5-8% of net profits on Environmental, Social and Governance improvement projects.

To remain the world’s top low-cost production the company is focusing on increasing operational efficiency, digitizing and automating the business processes and saving costs by using cheaper electricity.

Recycling, pollution reduction, and water resource management have significant importance in the company’s transformation strategy. Currently, we are cooperating with institutes such as Dresden Technical University, Freiburg Mining Academy, and organisations such as Copper Mark and others on several ESG-related projects.

The transformation of AMMC began in 2017 with its objective of opening to the global markets and diversifying from raw materials exporter to a producer of value-added and finished products. In 2022 the copper cluster was established with various incentives provided by the government in order to boost the manufacturing of semi-finished and finished products from copper. Development strategy 2030 has been developed for copper cluster. The government and AMMC are actively supporting private investors and joint-venture projects.

At the end of the presentation, Abdulla Azizov invited investors to take part in the international tenders for the right to use subsoil plots and strategic types of minerals organised by the Government’s Geology Committee.