Op-Ed: How NMMC became the golden asset of Uzbekistan’s economy

Uzbekistan is on a roll. The economy is booming, foreign investment has reached record highs, and general interest in the country as both a place to do business and a tourist destination is growing exponentially. As the largest company in Uzbekistan, Navoi Mining and Metallurgical Company, or NMMC, and by extension, the gold mining industry, are at the center of the economic expansion, helping to fuel wider investments in infrastructure, renewable energy and human capital.

In real terms, Uzbekistan’s economy grew by 6.5% in 2024, with nominal GDP reaching $115 billion, following a 6.3% real growth rate and a nominal GDP of $102 billion in the previous year.

NMMC saw its 2024 revenue soar by 30% year-on-year to $7.4 billion, equivalent to 6.4% of Uzbekistan’s GDP. The company was helped by higher gold prices and a 5.4% increase in gold production to 3.1 million ounces last year. NMMC is the fourth largest gold mining company in the world while Uzbekistan ranks 10th among gold producing nations. NMMC is also the largest contributor to Uzbekistan’s economy, accounting for approximately 20.9% of the country’s budget revenues in 2024.

Much of the credit for Uzbekistan’s recent success goes to President Shavkat Mirziyoyev, whose administration has opened up the economy and instituted a raft of legislative and administrative reforms. The government has pushed the country’s major state-owned companies towards adopting international accounting and operating standards and set them on a path to tapping international capital markets.

NMMC made its capital markets debut in October of last year with the successful placement of a $1 billion dual-tranche Eurobond. The transaction included $500 million in four-year notes with a yield of 6.70% and $500 million for seven years at 6.95%. It was the largest orderbook for an Uzbekistan issuer since the sovereign debut in 2019, peaking at $5.5 billion or 5.5x oversubscribed, as well as the first global DCM issuance from a major gold miner since June 2023. Investors hailed from around the world, including the United States, United Kingdom, Europe, Middle East and Asia.

Even with the debt issuance, NMMC remains fairly lowly leveraged for a major mining company, with a net debt/adjusted EBITDA ratio of 0.5x. The company boasts industry-leading low all-in sustaining costs of $979/ounce and a high EBITDA margin of 62%. With adjusted EBITDA of $4.6 billion last year, NMMC is well placed to invest in its capital program while still paying a healthy dividend.

NMMC’s expenditures related to the investment program totaled $580 million in 2024 is designed to continue expanding production by increasing throughput at existing mines and exploring and developing its near-mine license areas. With more than 47,000 employees, the company is vertically-integrated, with its own divisions for exploration, construction, transportation, engineering and machine-building, alongside mining, processing and refining. As a result, much of that capital investment stays within the Uzbek economy.

Some examples of capital projects financed last year include the ongoing expansion of mining capacity at our flagship Muruntau-Myutenbay deposit, the world’s largest open-pit mine. We expanded our BIOX plant for processing refractory ore with two new biooxidation units coming online in early 2025, thereby boosting capacity by 12%. We are also expanding the HMP №7 processing plant, which treats tailings from our heap leach.

As part of our commitment to sustainable development, NMMC is investing heavily in water treatment facilities with a goal of increasing the share of recycled water used in production to 40%, thus conserving 36 million cubic meters of fresh water per year. We are also renewing our mining fleet with the aim of improving efficiency and reducing environmental impact.

NMMC’s contribution to the local economy goes beyond its own operations. The company has an ongoing program to work with local industry to create new supply lines and replace imports. Goods valued at $72 million were produced under this localization program in 2024, both at NMMC’s own manufacturing facilities and at its industrial partners.

NMMC is a prime example of how the gold mining industry can have a positive economic impact well beyond its core operations. The company contributes to the government’s social programs via its tax contributions and through the dividends it pays out annually. At the same time, it invests heavily in infrastructure and encourages domestic manufacturing, all with a keen focus on sustainable development and social responsibility in the towns and villages where it operates.

The challenge going forward is for NMMC to continue to implement its transition program and to institute international best practices across its businesses while focusing on health and safety and improving working and living standards for its employees. The company is keen to maintain its competitive advantage as a low-cost producer while also investing in opportunities to increase production. Success in these efforts will ensure that NMMC and the gold mining industry will continue to play a significant role in Uzbekistan’s economy for generations to come.

* Jakhongir Khasanov is the chief financial officer of Navoi Mining & Metallurgical Company.