COMMERCIAL NEWS UPDATE

APRIL 2006

Prepared by Mr. Jahangir Kakharov,
BISNIS Representative, Tashkent, Uzbekistan

Uzbekistan decreases oil and gas condensate production

TASHKENT. March 29 (Uzreport) - Uzbekistan's national holding company Uzbekneftegaz produced 845,900 tons of oil and gas condensate in January-February 2006, down 13.5% year-on-year, the State Statistics Department said. Production of gas condensate was down 11.9% to 323,400 tons. Natural gas production slipped 2.1% to 10.407 billion cubic meters. Oil bitumen production rose by 7.9% to 39,400 and lubricant oil production grew by 7.4% to 34,800 tons. Uzbekneftegaz increased production of hydrocarbon-liquefied gas by 7.7% to 36,500 tons. The company decreased production by 13.8% to 212,500 and diesel fuel production fell by 10.3% to 211,400 tons.

Zeromax to invest US$60m to development of Kokdumalak field

TASHKENT. March 29 (Uzreport) - Zeromax GmbH of Switzerland, co-founder of Kokdumalak Gas JV, is planning to invest US$60 million in 2006 to realize second stage of utilization of associated gas in Kokdumalak field, Kashkardarya region. Zeromax GmbH is planning to invest over US$400 million to exploration and development of gas condensate fields in Uzbekistan. Last year, Kokdumalak Gas launched the first phase of the project with cost of US$30.9 million on utilization of associated gas in Kokdumalak field. The installed equipment allows utilize associated petroleum gas at the volume of 1.3 billion cubic meters per year.

The Uzbek-Swiss joint venture Kokdumalak – Gaz was formed in September 2004 by company Zeromax and Мubarakneftegaz with equal shareholding of each party. The venture’s principal activity is the delivery of equipment for utilization and compressing of oil-well gas and execution of building and assembly works in the Kokdumalak oil and gas complex.

Kokdumalak field is one of the largest deposits of oil and gas in Uzbekistan. The field was opened in 1986 and its reserves make up 55 million tons of oil, 67 million tons of gas condensate and 145 billion cubic meters of gas.

Uzdunrobita's net income makes up US$22.7m in 2005

TASHKENT. April 1 (Uzreport) - Uzdunrobita, No. 1 Uzbek mobile operator of Uzbekistan, contributed US$25.5 million to Mobile TeleSystems' (MTS) consolidated revenues or up 52.7% year-on-year, financial report of MTS for the fourth quarter of 2005 and full 2005 financial year said. The Uzbek company also contributed US$15.5 million to MTS' consolidated OIBDA (up 55.0% year-on-year) with an OIBDA margin of 60.6%. OIBDA represents operating income before depreciation and amortization. OIBDA margin is defined as OIBDA as a percentage of net revenues. Uzdunrobita contributed US$6.6 million to consolidated net income (up 73.7% year-on-year) of MTS for the fourth quarter. Net income of Uzndunrobita in 2005 was US$22.7 million. Fourth quarter ARPU (Average monthly service revenue per subscriber) of Uzdunrobita was US$15.9, down from US$18.3 in the previous quarter (annual ARPU for 2005 stands at US$16.2). The company calculates its average monthly service revenue per subscriber by dividing its service revenues for a given period, including guest roaming fees, by the average number of its subscribers during that period and dividing by the number of months in that period. Fourth quarter MOU (Average monthly minutes of usage per subscriber) was 450 minutes, an increase from 437 minutes in the previous quarter (annual MOU for 2005 at 433 minutes).MOU is calculated by dividing the total number of minutes of usage during a given period by the average number of subscribers during the period and dividing by the number of months in that period. MTS said in its report that the share of Uzdunrobita made up 55.1%. The company had 580,300 users to the end of the year.

Korean company to develop uranium field in Uzbekistan

TASHKENT. April 3 (Uzreport) - Uzbekistan granted permission to Korea Resources Corporation (Kores) to develop uranium deposit, Uzbek President Islam Karimov said at the meeting with Korean businesses in Seoul last week. President Karimov said South Korean company became the first, which got permission to develop uranium field in Uzbekistan. As earlier reported, the Uzbek government and Korea Resources Corporation have signed a deal to set up a joint venture on a parity basis with a charter capital of US$8.4 million, called Uz-Kores Mining, to explore gold fields in the Kyzylkum desert. Uzbekistan is the fourth largest country in the world on reserves of gold and uranium and eighth on their production.

Gazprom plans to finalize Uzbek PSA talks by July 2006

TASHKENT. April 5 (Uzreport) - Russian gas giant OAO Gazprom plans to wind up talks on a production sharing agreement in Ustyurt region in Uzbekistan by July, company Deputy CEO Alexander Ryazanov said at an energy forum in Moscow. "We are currently involved in negotiations and we assume that by July 1 we will complete negotiations on a PSA in Ustyurt region in Uzbekistan, where we will have gas resources," Ryazanov said. It is planned that this will be the second PSA between Uzbekneftegaz and Gazprom to develop gas condensate fields in Ustyurt region, worth a total of over US$1 billion. In the middle of April 2004, Gazprom and Uzbekneftegaz signed a 15-year PSA for the development of the Shakhpakhty field in Ustyurt region, involving direct investment in 2004-2007 of US$15 million. All of the gas produced is to be exported. At the end of January this year Gazprom CEO Alexei Miller and Uzbek Foreign Minister Elyor Ganiyev signed an agreement on the main principles and provisions of the production-sharing agreement at the Urga, Kuanysh and Achkalak fields in Uzbekistan's Ustyurt region. In addition, Miller and CEO of the Uzbekneftegaz national holding company signed an agreement on the main principles of carrying out geological studies of subsurface resources at investment blocs in the Ustyurt region. Uzbek President Islam Karimov said Gazprom would allocate US$260 million for geological exploration and development of these territories in 2006-2008. A total of US$400 million will be allocated for these purposes over the next four years and some US$1.5 billion will be spent on the project in total. Uzbekneftegaz and Gazprom signed a strategic cooperation agreement in the gas industry on 17 December 2002. The agreement calls for long-term purchases of Uzbek gas for 2003 - 2012, Gazprom participation in projects to produce natural gas in Uzbekistan under PSA, and cooperation in the development of gas transport infrastructure in Uzbekistan and the transport of Central Asian gas through the country.

Number of mobile users in Uzbekistan reaches 1.3m

TASHKENT. April 6 (Uzreport) - Number of mobile users in Uzbekistan reached 1.3 million, while number of internet users made up 1.08 million in the first quarter of 2006. These figures were announced at the session of the complex of Cabinet of Ministers of Uzbekistan on information systems and telecommunication dedicated to social-economic development in the first quarter of 2006. It was noted that the sector rendered services worth 114.6 billion soums.

Uzbekistan plans to attract US$1bn in 2006 – Uzbek minister

TASHKENT. April 6 (Uzreport) - Uzbekistan plans to attract US$8 billion soums of foreign investments in 2008, Uzbek Minister for Foreign Economic Relations, Investments and Trade Alisher Shayhov said at the Uzbek-Russian Business Forum on April 5. He said this year the country plans to involve investments worth US$1 billion and from US$2 billion to US$4 billion in near two-three years. Uzbekistan attracted over US$500 million to its economy in 2005. Uzbek minister said this is small amount of money for Russia in view of volume of country and its economy, but for Uzbekistan it is important as the country is moving to new level of development. Uzbek-Russian Business Forum was organized by chambers of commerce and industry of Uzbekistan and Russia. It considered wide-scale issues, including interregional economic cooperation and monetary-financial integration within Eurasian Economic Community. Russia is one of the largest trade partners of Uzbekistan. Bilateral trade turnover increased from US$1.6 billion in 2004 to US$2 billion in 2005. The share of Russia in foreign trade turnover of Uzbekistan makes up almost 22%.

Navoi Mining Complex negotiates with Russian Tehsnabexport

TASHKENT. April 6 (Uzreport) - Navoi Mining and Smelting Industrial Complex (NGMK) and Russian Tehsnabexport (Technology Supplies for Export) open-type joint-stock company are negotiating on joint development of uranium fields in Uzbekistan. NGMK is a monopoly in extraction, enrichment, and export of uranium in Uzbekistan. At this time, uranium is extracted by three divisions of the Complex and processed at the hydrometallurgical plant GMZ-1 in Navoi. Uzbekistan currently has the seventh largest uranium reserves in the world. The country's uranium base is composed of 27 fields in Kyzylkum desert. The total uranium reserves in these fields are estimated at approximately 55,000 tons.

Uzbekneftegaz offers new PSA to UzPEC Ltd

TASHKENT. April 6 (Uzreport) - Uzbekneftegaz national holding company is considering an opportunity to realize product-sharing agreement with British UzPEC Ltd on development of oil and gas deposits in Uzbekistan in new terms. UzPEC Ltd was founded by British Trinity Energy Group to realize oil and gas projects in Uzbekistan. UzPEC Ltd signed product-sharing agreement (PSA) with Uzbekneftegaz in 2001, which envisages investments for US$400 million. In 2004, SoyuzNefteGaz acquired 100% of UzPEC from Trinity Energy Group. In February 2005, Uzbekneftegaz decided to abolish agreement with UzPEC and withdraw license on development of fields in Central Ustyur and Southern-Western Gissar as British company did not fulfill its investment obligations. UzPEC found claims of Uzbek side groundless and refused to return license. The management of the company refused to accept the proposal of Uzbekneftegaz on development of project within joint venture. UzLITInefteaz developed new preliminary feasibility study of the project, which is being reviewed by both involved parties.

Coscom net profit makes up 1.68bn soum in 2005

TASHKENT. April 7 (Uzreport) - Uzbek-US telecommunications joint venture Coscom, third largest Uzbek mobile operator, posted a net profit of 1.682 billion soum in 2005, up from 36.7 million soum in 2004. Coscom's revenue rose about 40% on the year to 18.555 billion soum in 2005, while costs rose 38.7% on the year to 10.905 billion soum, the company said in its financial report. The assets of company rose 37.5% in 2005 to 49.582 billion soum as of 31 December 2005, capital expenditures increased about 80% on the year to 11.232 billion soum and liabilities rose about 50% to 37.707 billion soum as of 31 December 2005, the report said. Coscom plans to increase its subscriber base to 500,000 users by the end of 2006 from 145,597 users as of 31 December 2005. MCT Corporation of the USA holds 85% in Coscom, while the rest is controlled by individuals.

Gazprom, Uzbekneftegaz discuss cooperation issues in Moscow

TASHKENT. April 10 (Uzreport) - Chairman of Gazprom, Russian gas giant, Alexey Miller and First Deputy Chairman of Uzbekneftegaz, oil and gas company of Uzbekistan, Shavkat Majitov discussed issues of development of cooperation in oil and gas sector on April 10, 2006. In particular, the sides considered realization of agreement on main principles and conditions of product-sharing agreement on Urga, Kuanysh and Akchal deposits of Ustyut region of Uzbekistan and agreement on main principles and conditions of geologic study of interiors of investment blocks of Usyurt region. Currently, Uzbekistan produces about 60 billion cubic meters of gas, of which 5 billion cubic meters exported to neighboring countries – Kazakhstan, Kyrgyz Republic and Tajikistan. Uzbekistan started to export gas to Russia in 2003. In 2005, Russia purchased 8 billion cubic metres of gas and this year the purchase volume will reach 9 billion cubic meters. Uzbekneftegaz national holding company is authorized body on regulation of oil and gas activity in Uzbekistan, including exploration of oil and gas. On January 20, 2006, two companies inked document on prices for Uzbek gas and transit of gas through Uzbek territory. According to agreement, Gazprom purchases gas at the price of US$60 per 1,000 cubic meters and the transit price set at US$1.1 per 1,000 cubic meters per 100 kms. Earlier, Gazprom purchased Uzbek gas for US$42 per 1,000 cubic meters.

Uzdunrobita has over 670,000 users

TASHKENT. April 10 (Uzreport) - Russia's Mobile TeleSystems OJSC (MTS), the largest mobile phone operator in Russia and the CIS, said the number of subscribers in Uzbekistan made up 670,000 as of April 1, 2006. The company said its subscribers in Uzbekistan increased by 70,000 subscribers or 7.5% in March compared to the end of February 2006. Mobile TeleSystem owns 74% stake in UzDunrobita in Uzbekistan and has option to purchase remaining share in the company. MTS is the largest mobile phone operator in Russia and the CIS. Russian company said its consolidated subscriber base reached 61.05 million users as of March 31, 2006. According to official data, Uzbekistan had over 1.3 million mobile users to the end of March.

Uzbek GDP increases by 3.6% in 1Q 2006

TASHKENT. April 17 (Uzreport) - Gross domestic product (GDP) of Uzbekistan increased by 3.6% year-on-year in the first quarter of 2006, Cabinet of Ministers said on Saturday, April 15, at the meeting dedicated to the socioeconomic development of the country in January-March. The meeting analyzed the country's economic and social development in the first three months of this year and discussed the implementation of tasks in the priority areas of reforming the economy. Prime Minister of Uzbekistan Shavkat Mirziyoyev chaired the meeting. The meeting noted positive changes in the implementation of reforms in the priority areas. As compared with the same period of last year, GDP of Uzbekistan rose by 3.6%. Industrial output increased by 6.8% and agriculture production rose by 4.5%. The construction works grew by 3.6%. The transport and communications sector recorded growth of 7.3% and trade and public catering by 6.3%. The meeting said this positive process was achieved thanks to an increase in investments and export. The country's current account surplus made up US$387.1 million. The state budget implemented with surplus.

Chinese Citic to commission Uzbek soda plant in July

TASHKENT. April 17 (Uzreport) - Citic Pacific Ltd. (Citic) of China is planning to commission Uzbek Kungrad Soda Plant, located in Karakalpakstan, on July 21, 2006. According to Uzhimprom (Uzbek Chemistry Industry), currently the Chinese side is eliminating bugs in technical part of the plant, which was found in August 2005. At the same time, Uzhimprom is holding negotiations with Citic to speed up launch of plant with total cost of US$100 million. As earlier reported, the plant with capacity of 100,000 tons of soda ash per year should have been commissioned in August 2005, but commissioning works revealed problems in equipment, which should be eliminated by Citic, general contractor.
Citic and Uzhimprom signed the agreement on designing and construction of technologic part of Kungrad soda plant worth US$32.3 million. Financing of technologic part of the project carried out under credit of Industrial-commercial bank of China with insurance policy of China Export-Credit Insurance Corporation (90% of total contract cost) and Uzpromstorybank (Uzbek Industry and Construction Bank) under guarantee of the Uzbek government (10%). Uzhimprom is financing general construction works from own resources. It is planned that the plant will be opened in August 2004, but technical and financial problems hindered commissioning works and launch of the plant was re-scheduled to August 2005. The launch of Kungrad soda plant will allow Uzbekistan to meet domestic demand for soda ash and allow export soda ash and hydrate of sodium, as well as salt. According to estimates, Uzbekistan consumes 60,000-70,000 tons of soda ash annually. It is expected that various enterprises, producing chemical and construction materials, will use product of new plant. Kungrad soda plant will use raw materials located in Karakalpakstan – salt from Barsekelmes (approved reserves of salt makes up 131 million tons with 97% of sodium chloride in structure) and limestone from Djamansay (approved reserves over 70 million tons).

UzDaewoo Auto sells 15,273 cars in Russia in 1Q, plans produce new model

TASHKENT. April 17 (Autonews.ru) - UzDaewoo Auto sold 15,273 cars in Russia in the first quarter of 2006 against 15,199 cars in the same period of 2005. The Uzbek car make is the fourth among top 5 car sellers in Russia after Hyundai, Chevrolet and Ford, autonews.ru reported on 17 April. It is planned that the Uzbek car maker will produce re-styled version of Daewoo Nexia in September 2006. Queen Group, official distributor of UzDaewoo Auto in Russia, said the European Concept Group is working on design of car. The volume of investments comprises US$10 million in the first stage of the project. The price of the modernized Nexia will not widely differ from the price of the existing model.

Russia's Lukoil to launch major gas field in Uzbekistan in 2007

TASHKENT. April 20 (Uzreport.com) - Russia's Lukoil intends to commission a major gas field in Uzbekistan in 2007. "The company intents to launch a major natural gas deposit in Uzbekistan in 2007. This will make LUKoil not only an oil company but also an oil and gas company," said the LUKoil president, Vagit Alekperov, at a news conference in Russia. "The subsidiary of the Russian company LUKoil, LUKoil Oversees, has started designing work for a gas treatment plant at the Qandim gas deposit in central Uzbekistan," the report said. "The work is part of the Qandim-Hauzak-Shodi-Qongirot project which is jointly being implemented with Uzbekistan's national holding company Uzbekneftegaz (Uzbek Oil and Gas)," the report added.

Newmont's Uzbek venture sells 14% less gold in 1Q

TASHKENT. April 21 (Uzreport.com) - Newmont Mining reported that its Zarafshan-based venture decreased sale of gold by 14% in the first quarter of 2006 compared to the same period of 2005. The release of company said: "At Zarafshan in Uzbekistan, gold ounces sold decreased 14% in the first quarter of 2006 from the first quarter of 2005, primarily due to the timing of flows from the leach pads. "Tons placed on the leach pads increased 18% due to milder weather conditions. Costs applicable to sales per ounce increased 19%, primarily as a result of the lower production," it added. The financial reports of the company said 1.96 million tons of ore were processed in the first quarter of 2006 compared with 1.66 million tons in the same period of 2005. Direct mining and production costs increased from US$196 in January-March 2005 to US$234 in the reporting period.

Polus Zoloto not planning to buy out Newmont Mining's stake

TASHKENT. April 21 (Uzreport.com) - Polus Zoloto (Pole Gold) open joint-stock company is not planning to purchase stake in Uzbekistan, the company's Director-General Eugeniy Ivanov said. "To date, Polus Zoloto Company has not received an official offer from the American Newmont Mining Company on buying out of its holding in Zerafshan-Newmont JV operating on the territory of Uzbekistan," said Ivanov. "If such an opportunity existed, the management of Polus would carefully consider the issue and taking into account the substantial risks that are present in the work of the JV, it would not recommend the Board of Directors to approve the deal," he added. Meanwhile, Ivanov refused to specify what risks were present in the activity of the joint venture. Nevertheless, Ivanov noted that the company's management thought Uzbekistan was a promising region for gold mining. "We are aware of the risks and costs that are associated with Polus' entrance in the new country as a publicly-listed company. We have not yet received any offers from the Uzbek party to participate in any projects on the territory of the country, although we would be very much interested in such," he said.

Polus Zoloto is the leading gold producer of Russia. The group's assets portfolio includes ore and gravel deposits in Krasnoyarsk, Irkutsk, Magadan and Amur oblasts. The company's estimated reserves made up 18.9 million ounces of gold as of 1 April 2005 (Russian qualification B+C1), and resources - 40.8 million ounces of gold (Russian qualification C2+P1). In 2005, the company's unaudited turnover made up US$462 million, which is 4.5% higher than in 2004 (US$442 million). The gross profit for the year 2005, according to preliminary estimations, has dropped to US$183 million from 207 million in 2004. EBITDA indicator constituted US$182 million.

China's CNEEC to supply US$15m equipment for Uzbek power plant

TASHKENT. April 21 (Uzreport.com) - China National Electric Equipment Corporation (CNEEC) has signed a contract with the Agricultural and Water Resources Ministry of Uzbekistan to supply equipment to construct two small hydroelectric power stations worth US$15 million. Under the contract, CNEEC will supply water turbines and generators to construct the Andizhanskaya hydroelectric power station, which has a projected capacity of 50 megawatts and the Akhangaranskaya hydroelectric power station, which has a projected capacity of 21 megawatts. The two power plants are to be built in two years. Uzvodenergo, which manages the hydroelectric power stations of Uzbekistan, is part of the Agricultural and Water Resources Ministry. To finance the constructions, Uzvodenergo plans to use both its own funds and a US$23.4 million 15-year loan provided to Uzvodenergo by China's Eximbank to build the second phase of the Tupolangskaya hydroelectric power station. The Agricultural and Water Resources Ministry concluded a $27.5 million contract with CNEEC to supply equipment for the construction of the second phase of the Tupolangskaya hydroelectric power station in June 2005. However in early 2006 Uzbekistan's government abandoned its plans to build the second phase because of technical problems. Uzvodenergo plans to launch the first phase of the power plant with a capacity of 30 megawatts by July. Uzbekistan's electric power output was at 47.851 billion kilowatt hours (kWh) in 2005, down 4.2% on the year, with hydropower plants accounting for 7.282 billion kWh.

Oxus buoyed by Uzbek operations despite difficulties in Kyrgyz Republic

TASHKENT. April 24 (Uzreport.com) - Despite difficulties at its Kyrgyz development project, London-based Oxus Gold has been buoyed by operating success at its Amantaytau gold operations in Uzbekistan. Oxus reported earnings of US$3.8 million on revenues of US$6.9 million (US$1.31 per share) in the six months ended 31 December. That compared with a US$3-million profit on revenues of US$5.5 million in the second half of 2004. Amantaytau Goldfields, the joint venture with the Uzbek government in which Oxus holds a 50% interest, booked an operating profit of US$9 million in the 6-month period. Oxus accounts for its share of that profit -- US$4.5 million -- as revenue. In the last half of 2004, Amantaytau made US$4.2 million, and for the whole of 2005, Amantaytau cleared US$13.3 million. In 2005 Amantaytau mined 1.6 million tons and processed 1.5 million, grading 4.3 grams gold per ton, to produce 161,615 oz. gold. Production was higher than in 2004, when Amantaytau produced 148,511 oz. gold from 1 million tons of ore grading 5.8 grams per ton. The higher production came entirely from the greater throughput; both head grade and recoveries declined in 2005, the latter to 77% from 83% the year before.

Oxus has also brought a second ore body into development at Amantaytau, the Vysokovoltnoye deposit. Vysokovoltnoye is an open-pit and heap-leach operation with reserves of 1.7 million tons grading 127 grams silver and 1.1 grams gold per ton. So far, Vysokovoltnoye has produced only from test pads, but the main leach pads are now being stacked and leaching and gold recovery was scheduled to start in March.

Test mining on the underground orebody at Amantaytau was also scheduled to start in March, for detailed metallurgical test work. Oxus is having a plant designed for the sulphide project, and arranging permit with the Uzbek government. The sulphide project exploits two zones, Central and North, which have combined reserves of 9.7 million tons grading 7.8 grams gold per ton (based on a 3.5-gram cutoff grade). There is a total mineral resource, including the reserve, of 17.8 million tons grading 6.8 grams per ton.

About 10 km southwest of Amantaytau, three deposits -- Asaukak, Aksai, and Northern Asaukak -- were drilled in late 2005. At Asaukak, a new resource calculation is under way. Drilling there intersected 10.4 grams gold per ton over 5 meters and 5.3 grams over 20 meters, all near surface. Further drilling is planned on the other two prospects, where drilling encountered grades similar to Soviet-era resource estimates, around 4 grams per ton. Aksai shows a mineralized strike length of 350 meters and Northern Asaukak, 500 metres.

British companies to invest US$3m in Uzbek coal deposits this year

TASHKENT. April 24 (Uzreport.com) - A UK consortium, including SAB Energy, Shadella Inc. and M.Metal&Co, plans to invest US$3 million in the development of coal deposits in Uzbekistan in 2006, Uzbekistan's Shargunugol coal company announced in April. Shargunugol coal company, 41.57% owned by the consortium, has a license to develop the Baisunsky and Shargunsky coal deposits, which are located in the southern part of Uzbekistan. The consortium plans to spend the investments on buying equipment, which would allow for the company's coal output capacities to increase, the company said. The proven coal reserves of the Baisunsky and Shargunsky coal deposits amount to 45.8 million tons, Prime-Tass reported. The consortium acquired the stake in Shargunugol in January for US$1.6 million from the Uzbek government and according to the deal, the consortium should also pay US$1.3 million to redeem Shargunugol's debt. The Uzbek government still holds in Shargunugol a 51% stake, which includes a 26% stake controlled by the largest coal producer in the country Uzbekugol. Shargunugol's employees hold 7.43% in the company. In 2005, Shargunugol's coal output increased 26.2% on the year to 73,200 tons. Uzbekistan's total coal output increased 17.4% on the year to 3.168 million tons in 2005.

First ore at Uzbek Khandiza deposit by end 2007 -Govt

TASHKENT. April 24 (Uzreport.com) - The production of concentrate at Uzbekistan's polymetal ore deposit Khandiza in the southern Surkhandarya region is forecast to begin at the end of 2007, the government said. A mining and concentrating complex is being built at the deposit to process 650,000 metric tons of ore a year. The deposit has reserves of 14.4 million tons, with a silver content of 134 grams/ton, zinc content of 7.24 grams/ton, lead 3.5 grams/ton, copper 0.86 gram/ton and gold 0.38 gram/ton, the report said. The zinc and copper concentrate will be supplied to the Almalyk Combine for smelting. UK-based Marakand Minerals is creating a joint venture with Uzbekistan's Goskomgeologia to develop the deposit at the cost of US$75 million. Marakand Minerals is owned by Oxus Gold Plc, which holds an exclusive license to develop the deposit. Oxus Gold Plc also has license to develop gold deposit in Uzbekistan.

New marketing company to sell Kandym gas

TASHKENT. April 24 (Uzreport.com) - Natural gas produced by Lukoil and Uzbekneftegaz consortium within the Kandym project in Uzbekistan will be sold by a special marketing company, Interfax reported quoting senior official of Uzbekneftegaz. The creation of such a company is envisaged in the PSA for Kandym project, Uzbekneftegaz First Deputy Chairman Shavkhat Mazhitov said at the discussion: “Russian and Uzbekistan: energy dialog” in April. The project is progressing according to schedule, he said. Industrial production is due to begin in the third quarter of 2007, but it could start somewhat earlier, he said. Lukoil carried out geological exploration and discovered a new field at one of its sections within this project, he said. Discussions are now being held about either raising investment in the project to US$50 million (from US$45 million) or spinning out the structure in a separate PSA.

UzDaewooAvto car production up 7.6% on year in 1Q

TASHKENT. April 25 (Uzreport.com) - Output of UzDaewoo Auto, Uzbek car producer, increased 7.6% on the year to 28,296 units in January-March. The output of Nexia cars increased 15.6% on the year to 17,279 cars in January-March, the output of Matiz cars rose 4.8% to 7,877 cars, the output of Damas cars fell 20.1% to 3,055 cars and the output of Lacetti cars amounted to 85 cars. In 2005, the plant's car output rose 44.2% on the year to 101,010 cars, exports rose 48.9% to 53,092 cars, and domestic car supplies increased 32.4% to 46,127 cars. In 2006, the company plans to produce 142,000 cars, including 68,500 cars for export, while in 2008 UzDaewooAvto plans to produce 200,000 cars. UzDaewooAvto, formerly an Uzbek-South Korean car manufacturing joint venture, is fully owned by the Uzbek association of car producers Uzavtosanoat. In mid-October 2005 UzDaewooAvto extended its agreement with General Motors (USA) on component part supplies from companies in South Korea.

German company to supply mining equip worth US$30m to Uzbekistan

TASHKENT. April 25 (Uzreport.com) - Germany's Engineering Dobersek GmbH has signed an agreement to supply gold mining equipment to Uzbekistan's Navoi Mining and Smelting Combine (NGMK) worth US$30 million. NGMK started building a gold mining complex worth about US$150 million in November 2004. The mining complex will include a gold extracting factory in Uchkuduk and mining companies at the Kokpatas and Daugistau fields. The construction involves two stages. The first stage, worth US$80.5 million and to be completed in 2007, involves the construction of facilities for enrichment and biooxidation of gold-sulfide ore at the Kokpatas field, the company said earlier. This will enable the mining complex to reach its planned capacity of 3 million tons of ore processing and 10 toes of gold output annually in 2008. The second stage, to be completed in 2010 and worth about US$70 million, envisages an increase in the capacity of the gold mining complex. NGMK is Uzbekistan's largest gold producer and holds a monopoly in the country in the production and export of uranium. Annual gold output at NGMK has been in the range of 57 tons and 59 tons over the past few years with total gold output in Uzbekistan amounting to about 80 tons per year. By 2010 NGMK plans to increase its gold output by 20%.