Transformation program of Navoi Mining and Metallurgical Company

Eugene Antonov, Chief Transformation Officer of Navoi Mining and Metallurgical Company presented transition plans for one of the largest mining enterprises in Central Asia. Mr. Antonov has previously worked in senior management roles in large international mining companies, such as Teck Corporation, and Kinross Gold, and most recently served as the COO of Trans-Siberian Gold Plc., the UK-listed gold producer.

Until recently, like many other state-owned companies, NGMK has been closed and tightly regulated. With the average ore grade of 1.2 g per ton in 2021, the large-scale operation and significant margins contribute to NGMK’s healthy profits. In 2021 the company’s revenue was almost $5 billion USD.

The company’s main asset is Muruntau – one of the largest open pit mines in the world with a production lifespan of 50 years. It’s located in the Qizilqum Desert and stretches up to 4 km and over 600 m in depth.  The company also operates several satellite deposits. Muruntau mine currently produces over two million ounces of gold per year and has estimated reserves and resources of over 100 million ounces of gold. The mine is equipped with one of the world’s largest conveyor systems which transports ore to the surface at 37 degrees angle.  The ore is processed by the mill which has a 50 million tons annual capacity. In the first six months of 2022, NGMK produced over 1.4 million ounces of gold making it the fourth-largest producer in the world. The target production level is over 2.7 million ounces before the end of the year.

The company is undergoing stage five of mine expansion at Muruntau to access new zones. By 2030 through an ambitious expansion program, the company is planning to reach over 3 million ounces per year.

In terms of resources and reserves, NGMK holds third place in the world with over 158 million ounces of gold resources.  NGMK holds a second place as the lowest-cost producer (total cash cost per ton) and is considered the world’s number one low-cost producer if measuring all sustaining costs. All efforts are aimed at keeping low-cost production which is especially important in an unpredictable gold price market. A strong balance sheet and financial ratios, especially debt to equity, allow the company to receive preferential financing to fund its ambitious expansion program.

Being the national industry champion the company’s objective is to become a global leader.  In 2019 NGMK separated non-core assets and uranium business so that it could focus entirely on gold production.

NGMK is carrying out initiatives to achieve operational excellence such as the introduction of fleet management systems. It started an ambitious digital transformation and mine control programme to excel in its operations.

The company is developing a very ambitious exploration program to expand a vast mineral resource base. The program will focus on the extension of current major deposits and prospecting of the surrounding areas within the proximity of the existing mines. The new exploration program will start in 2023. The company is planning to spend up to 2% of its revenue on exploration in line with international practices.

The company has also started a transition of the corporate culture to align with the best international practices. NGMK is currently reviewing corporate governance and performance management system to meet the company’s strategic goals and develop internal competencies. The company is bringing broad expertise to assist to achieve its objectives.

The ESG program plays an important role in the company’s transformation. The program is focused on renewable energy sources, and water management systems which are vital given the company’s desert location. Water is one of the main constraints of expansion plans.

During the conference and participation in other events, the company’s representatives held talks and meetings with over 100 international investors, financiers, commodities, and stock exchanges to discuss the company’s global IPO and ambitious development plans in Uzbekistan and Central Asia.

Being one of the largest mining enterprises in Central Asia, NGMK will be working alongside the Government of Uzbekistan to create favourable business climate and drive foreign direct investment in mineral exploration, modernisation of mining infrastructure, and transition to a Zero carbon economy.