UZBEKISTAN COMMERCIAL NEWS UPDATE
August 2006
Prepared by Mr. Jahangir Kakharov,
BISNIS Representative, Tashkent, Uzbekistan
NOTE: THIS
COMMERCIAL UPDATE IS DRAWN FROM THE UZBEK PRESS AND OTHER OPEN SOURCES AND
SHOULD NOT BE INTERPRETED AS OFFICIAL U.S. GOVERNMENT INFORMATION
World Bank
discusses strategy for Uzbekistan
TASHKENT. July 28
(Uzreport) - The World Bank's Board of Executive Directors
discussed on July 27 a new Interim Strategy Note (ISN) for Uzbekistan. The
Strategy agreed by the World Bank and the Government of Uzbekistan covers a 12
to 15 month period and focuses on technical assistance and analytical and
advisory services. It also includes provision for a limited amount of lending
for global public goods and basic social services. As a transitory assistance
framework, the interim strategy reflects the need to strengthen the poverty
orientation of public policy, to deepen structural reforms, and to ensure
broader civil society participation. A review at the end of the ISN period will
gauge whether broad progress has been made in each of these areas and will form
the basis for a determination of the country's eligibility for future lending
assistance. The strategy seeks to engage the Uzbek authorities along two
parallel tracks. First, the World Bank will use technical and advisory
assistance, including a governance assessment, and a review at the end of the
ISN period to engage the authorities on the need for greater openness and
accountability and faster market-oriented reforms. Second, limited new lending
for global public goods and basic social services will allow the Bank to
develop and test implementation arrangements that expand stakeholder
involvement. "The interim strategy focuses technical assistance on key
areas of reform and provides a tool to monitor improvements in basic services
taking into account the prevailing country context," says Shigeo Katsu,
Regional Vice President for Europe and Central Asia. The limited amount of new
lending envisaged during the ISN period will support global public goods,
including an operation to fight avian influenza, as well as funding for a
project to reform basic education. In addition, the International Finance
Corporation, the private sector affiliate of the World Bank Group, will support
selected private sector investments. "The interim strategy provides for
the involvement of a broad group of stakeholders in the design, implementation
and monitoring of projects with the goal of achieving direct benefits for the
people of Uzbekistan," says Mr. Katsu. The World Bank's current portfolio
in Uzbekistan includes six investment operations: two operations in the water
sector (Rural Water Supply and Sanitation and Health approved in 1998;
Bukhara-Samarkand Water Supply, approved in 2002), one operation in primary
health care (Health II, approved in 2004), and three operations in the rural
sector (Rural Enterprise Restructuring, approved in 2001; Drainage and Wetlands
Improvement, approved in 2003, Tashkent Solid Waste, approved in 1999).
Net commitments are US$275.1 million, with US$37.4 million disbursed, US$13.7
million cancelled, and US$156.8 million outstanding. In addition, the Bank
manages a regional grant-funded HIV/AIDS project of US$25 million for four
countries including Uzbekistan; a Global Alliance for Improved Nutrition (GAIN)
grant of US$2.8 million for flour fortification; as well as a small regional
Global Environment Fund (GEF) grant for biodiversity.
Two ADB loans to
help address land degradation in Uzbekistan
TASHKENT. July 28
(Uzreport) - Two ADB loans totaling more than US$60 million will
help Uzbekistan farmers boost their incomes by addressing some of the country's
worsening land degradation problems. The project will tackle land degradation
in about 162,300 hectares of irrigated land in nine districts of three
provinces - Bukhara, Kashkadarya, and Navoi. These areas, where crop yields
reportedly have declined by 30% since 1991, suffer the most serious forms of
land degradation, directly affecting about 1.4 million rural people. Poor water
management, deteriorating irrigation and drainage systems, and policies that
reduce incentives to invest in land improvement are seen to be causes of the
problem. "Land degradation is a serious economic, social, and environmental
problem in Uzbekistan and the rest of Central Asia," says Plamen Bozakov,
an ADB Water Resources Specialist. "It directly affects livelihoods in
rural areas by reducing land productivity and causing massive losses in
agriculture." The project aims to improve land reclamation practices and
set up three farms to demonstrate innovative farm technologies and enhanced
agronomic practices. It will also rehabilitate drainage and irrigation to
improve water control and efficiency. Institutions at all levels - central, provincial,
and community - will be strengthened so they can better address land
degradation issues. The project will also promote policy reforms to help
increase farmers' incentives to raise land productivity and invest in land, as
well as improved rural governance. ADB is lending US$32.6 million from its
ordinary capital resources (OCR) and US$27.6 million from its concessional
Asian Development Fund (ADF). The OCR loan carries a 25-year term, including a
grace period of 5 years, and an interest rate to be determined. The ADF loan
carries a 32-year term, including a grace period of 8 years, and an interest
charge of 1% per year during the grace period, and 1.5% per year thereafter. An
US$800,000 technical assistance grant, cofinanced by the Poverty Reduction
Cooperation Fund, from the Government of the United Kingdom, accompanies the
loans to help the Government strengthen relevant institutions and prepare
needed legislation. The Government and project beneficiaries will contribute
about US$16 million equivalent towards the project's estimated total cost of
US$76.18 million. For the technical assistance project, the Government will
contribute US$200,000 in the form of office space, logistical support, and
counterpart staff. The Ministry of Agriculture and Water Resources is the
executing agency for the project, which is due for completion in September
2012.
Uzbekistan grants tax benefits to local
medications producers
TASHKENT. July 31
(Uzreport) - President Karimov granted tax benefits for the
domestic producers of medications and goods of medical purpose. The benefits
will be valid until January 1, 2009. On 14 July the President signed a
resolution "On measures to support domestic producers of medications and
goods of medical purpose", intended to form a competitive environment in
the domestic market of medications and medical goods, as well as satisfy the
population's demand for competitive domestically produced medications and
medical goods more fully. In particular, the resolution exempts the medications
and medical goods produced and sold by domestic producers, as well as resources
and materials imported for localized production of medications and medical
goods from the value added tax for the period from July 1, 2006 to January 1,
2009. Moreover, the document establishes new procedure, under which customs
duties on the resources and materials imported for the production of
medications and goods of medical purpose are paid no later than 60 days after
registration by the customs office.
Within one-month period, the Ministries of Economy, Finance, and Foreign
Economic Affairs, Investment and Trade, and State Customs Committee together
with the Ministry of Healthcare of the Republic of Uzbekistan and Uzfarmsanoat
(Uzbekistan Pharmaceutical Industry) State Joint-Stock Company will approve the
list of resources and materials to which the benefits established under this
resolution apply. If the resources and materials imported for the production of
medications and goods of medical purpose are used for other purposes, the
amount of VAT and the income on the sale of resources and materials are
collected and directed to the state budget together with the corresponding
financial sanctions levied in accordance with the established legislation. Starting July 1, 2006, for the domestic
companies producing medications and goods of medical purpose the resolution
introduces tax benefits available for the producers of commodities under the
provision 1 of the Resolution of the Cabinet of Ministers of the Republic of
Uzbekistan dated November 13, 2002 No. 390 "On measures to stimulate
market saturation with consumer goods and improve interaction between producers
and trading organizations." Under the resolution, companies producing
consumer goods pay tax on income earned from the production of consumer goods
at a 20% discount against the existing rate. Also companies producing consumer
goods are granted the right to determine the amount of annual appropriations
for depreciation and amortization independently, based on the fixed assets'
useful life. At the same time, for the purposes of taxation, the annual amount
of appropriations for depreciation and amortization should not exceed the norms
established under the Tax Code of the Republic of Uzbekistan. In estimation of
the income tax, the companies' costs associated with advertising of the
produced consumer goods are fully deducted from the taxable base. Uzfarmsanoat
SJSC together with Uzkimyosanoat SJSC, Science Academy of Uzbekistan, and other
ministries and departments concerned is to develop and submit to the Cabinet of
Ministers a complex programme of production of resources and materials used in
the production of medications and goods of medical purpose in accordance with
the established order by September 1, 2006.
IFC Board approves
US$3m credit line to Uzbek bank
TASHKENT. August 1
(Uzreport) - The Board of International Finance Corporation (IFC)
approved a second senior credit line of up to US$3 million to Hamkorbank JSC
and further technical assistance to the Bank in certain specific areas on 28
July. Hamkorbank is one of the largest privately owned banks in Uzbekistan,
headquartered in Andijan, a northeastern town in Uzbekistan and focused on
micro and small business lending. Initially the bank concentrated on the Andijan
region, but has gradually spread its business to the neighboring Fergana region
and major cities in Uzbekistan. The bank offers not only SME loans but also
micro loans, consumer loans and leasing products. Hamkorbank has been an IFC
client since 2001, when IFC made a first investment of US$1 million, along with
the technical assistance, for the purpose of sub-lending to small and micro
entrepreneurs in the region. Hamkorbank was initially founded as a closed
joint-stock company. In 1992 it was reregistered as open joint-stock commercial
company. Its shares are traded on the Uzbek stock exchange. The bank's
shareholding structure is thinly dispersed among over 3,800 shareholders,
almost 90% of which are individuals. Mr. Ibragimov, Chairman, together with family
members, controls about 15% of the bank's voting stock. Presently, the bank has
22 full-service branches and 41 mini-banks nationwide. The mini-banks are very
small branches that function as teller/cashier for consumer transactions such
as utilities payment, money transfers and deposits, the web site of the IFC
said. The web site of the IFC said the development impact of the project is
significant. IFC's first credit line to the bank played an important role in
supporting small business growth, fostering income generation and creation of
new jobs. In addition, the sub-borrowers financed through IFC credit line were
able to invest in new technologies, expand existing operations and increase
efficiency of their production activities. The proposed second IFC credit line
will be provided to finance a growing SME loan portfolio and it is expected to
further support the growth of SMEs, income and employment in the same region.
In addition, through the technical assistance and the continuous supervision of
the investment, IFC will support the enhancement of risk management of the
bank, reporting and portfolio monitoring, as well as the enhancement of staff
skills. The proposed project would provide long-term resources for origination
of loans to private SMEs.
UzACI board meets
to sum 1H results
TASHKENT. August 1
(Uzreport) - On July 28, Board of Uzbek Agency for Communication
and Information (UzACI) held a session to sum up the results of activity of the
sector in the first half of 2006. UzACI said the general income of
communication and information sphere increased by 37.3% year-on-year and the
volume of rendered services by 35%. The number of mobile communication users
increased by 52% to 1.75 million. The number of internet users made up 1.2
million people or 45.6 users per 1,000 people. The number of economic entities,
which render Internet services (Internet cafes) comprised 581. The number of
companies, which produce software, reached 132 companies. The volume of
software market estimated at around US$9.5-10 million.
Over 78 accredited homogeneous product
certification agencies included in State Register
TASHKENT. August 1
(Uzreport) - The total of 78 accredited homogeneous product
certification agencies, 4 quality management system certification agencies, 285
accredited testing laboratories, 147 expert-auditors, and 14 accredited
consulting and inspection companies are included by the Uzbek Agency for
Standardization, Metrology and Certification in the State NSS Register of
Uzbekistan, according to information published by the agency's web-site as of
July 1, 2006. Uzstandard Agency is a national accreditation agency of
Uzbekistan. Pursuant to the active legislation, it implements state policy in
the field of accreditation, establishes general rules and order for conducting
accreditation of testing and measuring laboratories, certification and control
agencies, organs responsible for pre-shipment inspection and expert auditors.
In addition, it administers National System of Accreditation of the Republic of
Uzbekistan; represents Uzbekistan in bilateral and multilateral relations with
foreign and international organizations on the issues of accreditation and
mutual recognition of works; accredits the organs of homogeneous product
certification, testing laboratories (centers), control agencies in the field of
certification, as well as quality expert auditors; keeps the State register of
accredited certification agencies, State register of accredited testing
laboratories (centers, state register for certification of quality management
systems); and exercises inspectional control over the accredited certification
agencies and testing laboratories (centers). Uzbek Agency for Standardization,
Metrology and Certification (Uzstandard Agency) is the national agency of the
Republic of Uzbekistan competent in the issues of standardization, metrology,
certification and quality management. The agency acts in line with the existing
legislation directly or through the subordinate organizations and is the
affiliated member of the International Laboratory Accreditation Cooperation
(ILAC).
Document on
accreditation of organs for certification of uniform production effected
TASHKENT. August 2
(Uzreport) - In accordance with an order of the director general of
the Uzstandart agency of 27 July, 2006, a document "Accreditation rules of
agencies on the certification of uniform production, test (measuring)
laboratories (centers), control organs in the realm of certification",
registered by the Ministry of Justice of the Republic of Uzbekistan on 17 July,
2006, № 1596 came into effect, the agency's site reports. These rules
establish the procedure of accreditation of agencies on the certification of
uniform production, test (measuring) laboratories (centers), control organs in
the realm of certification, carrying out work on estimation and confirmation of
correspondence of production, services, personnel and the systems of quality,
production tests in accordance with the laws of the Republic of Uzbekistan of
28 December, 1993, "On the certification of production and services",
"On the metrology" and the Regulation about the Uzbek agency of
standardization, metrology and certification, approved by a decision of the
Cabinet of Ministers of the Republic of Uzbekistan of 5 August, 2004, of
№ 373, and are applied to agencies on the certification of uniform
production, test (measuring) laboratories (centers), control organs in the
realm of the certification of the Republic of Uzbekistan and of foreign
countries, carrying out work on estimation and confirmation of correspondence
of production and services, personnel and the systems of quality in the
territory of the Republic of Uzbekistan. From the day of the coming into effect
of the indicated document the State Standard of the Republic of Uzbekistan
OzDSt 16.1 "Standardization Agency of the Republic of Uzbekistan. The
procedure of accreditation of agencies on certification and control
organs" became invalid. The Uzbek agency of standardization, metrology and
certification (the Uzstandart agency) is a national agency of the Republic of
Uzbekistan on standardization, metrology, certification and management of
quality. The agency directly operates its activity in accordance with the
current legislation, and through its subordinate organization, and it is the
associate member of international conference on accreditation of test
laboratories (ILAC).
Lukoil Overseas gives priority to Central
Asia
TASHKENT. August 2
(Uzreport) - Lukoil Overseas Holding Ltd gives priority to Central
Asia in planning its future activity, Neftyaniye Vedomosti (Oil News) quoted
Company President Andrei Kuzyaev. The Company has formed several oil production
centers. "This is, first of all, Kazakhstan, where by 2010 oil production
will be raised to 10 million tons yearly, and Uzbekistan, where the same output
is expected in 2012," Kuzyaev said. He also noted that the company is
interested in cooperation with Turkmenistan, particularly in procurement of
exploratory assets, first of all, on the Caspian shelf. Speaking of the export
of oil from Kazakhstan to China along the Atasu-Alashankou route, Andrei
Kuzyaev said that the company had not yet started the supply of the resource,
but the company had such plans. "The principle decision has been made,
though some commercial negotiations with the CNPC are to follow. We are talking
about the possibilities of oil supplies from our joint venture with the CNPC,
Turgai Petrolium, located in Kumkol field. Right now a major portion of
supplies from the field goes to the system of Caspian Pipeline Consortium and
Kazakhstan's domestic market," he said. "Lukoil does not intend to
introduce principle changes in the export supplies from Kazakhstan. The main
volume goes along the CPC, a part along the Samara pipeline, a part (from Severniye
Buzachi) along the sea-route Aktau-Mahachkala, and a part is supplied to
Orenburg Gas Processing Plant and oil processing plants of Kazakhstan. We use
all the export routes available in Kazakhstan. Small volumes of oil from
Kumkol, 20,000 tons, will be supplied to Uzbekistan monthly," Kuzyaev
concluded.
Uzbekistan seize some gold, assets of
Zarafshan-Newmont
TASHKENT. August 3
(Uzreport) - Newmont Mining Corp. said that some gold and assets of
its joint venture in Uzbekistan were seized by that country's tax authorities,
and that the joint venture's ability to operate normally has been impaired. The
Zarafshan-Newmont joint venture's gold shipments out of the country were
halted, Newmont said in a filing with the Securities and Exchange Commission,
and as a result, the company's London bank account containing US$14 million was
frozen by the European Bank for Reconstruction and Development. The joint
venture has an outstanding debt obligation with the bank of about US$20
million. The seizure was a result of the joint venture's losing an Uzbekistan
economic court case in June. The court ruled that the joint venture owed US$48
million in back taxes. Newmont said it will appeal the ruling, and that the
joint venture has an Uzbekistan government decree that protects it from changes
in the country's tax laws. Newmont owns a 50% share of the joint venture and
sold 122,700 ounces of gold from it in 2005. Newmont sold 1.84 million ounces
of gold from all its operations in 2005, according to past SEC filings.
Newmont's share in the joint venture represented 1.69 million ounces of the
company's proven and probable gold reserves as of 31 December 2005.
Tender for Navoi and
Tahiatash Heat Power Plants shares fails to draw bids
TASHKENT. August 7
(Uzreport) - State Property Committee (SPC) of
Uzbekistan announced that the tender for the state's shares in Navoi and
Tahiatash Heat Power Plants failed, Uzbekenergo reported. The privatization
consultant for the tenders is Russian Finam Investment Company. The tender
failed to draw bids, though several foreign investors showed interest in the
bids, and even purchased tender documents. The tender on the sale of 39% shares
of Navoi Heat Power Plant (TES) and 38.9% shares of Tahiatash TES was announced
on November 29, 2005. In January, the SPC extended tender deadline to 1 March.
No information is available on whether the government will make another attempt
to sell the objects and reduce the sales price. The established capacity of
Navoi TES is 1,250 MWatt. The annual volume of electric energy produced by the
TES makes up over 6.4 billion kWt/h. The established capacity of Tahiatash TES
is 730 MWatt, and its annual volume of electric energy produced totals some 2.8
billion kWt/h.
Unitel announces
official merger with Buztel
TASHKENT. August 8
(Uzreport) - Unitel LLC and Bakri Uzbekistan Telecom
(Buztel) LLC officially announced on reorganization in form of merger of Buztel
to Unitel, press release of Unitel said on Tuesday, August 8. The release said
after reorganization of Unitel and Buztel in accordance with legislation of
Uzbekistan, Unitel will continue its work and it will become assignee of Buztel
on all its rights and liabilities. Evgeniy Ruban, director-general of Unitel,
commented reorganization and said: "Merger is important event for us. Now,
using resources of both companies, we can built more effective network and
ensure high quality of communication in Uzbekistan." Unitel is the second
largest Uzbek mobile communication operator and it is part of Vimpel-Communications,
or VimpelCom. VimpelCom is one of the largest operators in CIS and renders
services in Russia, Kazakhstan, Ukraine, Tajikistan and Georgia along with
Uzbekistan. The VimpelCom Group's cellular license portfolio covers a territory
with a population of about 237 million. Geographically, it covers 78 regions of
Russia (136.5 million, representing 94% of the Russia's population), and the
entire territory of Kazakhstan, Ukraine, Tajikistan, Uzbekistan and Georgia.
VimpelCom was the first Russian company to list its shares on the New York
Stock Exchange ("NYSE"). VimpelCom's ADSs are listed on the NYSE
under the symbol "VIP".
USDA publishes report
on bio-engineered crops in Uzbekistan
TASHKENT. August 8
(Uzreport) - Uzbekistan does not commercially grow
any bio-engineered crops nor does it have any regulations in place affecting
imports of these products. There are no regulations concerning labeling of
processed food products, US Department of Agriculture's (USDA) Foreign
Agricultural Service said in its new report.
The report said US agricultural trade to Uzbekistan is hampered by Uzbekistan's
complex trade regime based on an import-substitution policy and aided by high
tariffs. The US agricultural exports have averaged US$8.3 million over the past
three calendar years (2003-2005), and most was comprised of food assistance in
oilseeds, rice and vegetable oil. Uzbekistan's major imported commodities
include: sugar, butter and some consumer foods.
Uzbekistan does not commercially produce any biotechnology crops. The Uzbek
Institute of Genetics and Plant Experimental Biology is doing some research on
biotechnology crops. However, there are no published results from this research
and no immediate plans that any bio-engineered crops will be produced
commercially in Uzbekistan in the foreseeable future.
Up until FY 2005 Uzbekistan had been a food aid recipient. No problems existed
for imported GMO soybeans or soybean oil to the country.
Currently, Uzbekistan has no laws or regulations governing the approval, production,
importation or labeling of bio-engineered agricultural products, including
processed foods, animal feed or seed. According to the Ministry for Foreign
Economic Relations, Investments and Trade (MFERIT) and the State Committee for
Protection of nature (the main governmental organizations responsible for
biotech issues), a draft Government decree dealing with the production and
import/export of genetically modified agricultural products is under
development.
The government has tasked the Institute of Genetics and Plant Experimental
Biology to develop documents on the use and safety of biotech products.
However, the government has not approved the draft decree because it is still
under preliminary consideration by a number of different ministries. Based on
observations of official and independent experts, the government is not
expected to approve the decree in the near future. The draft is not expected to
be very restrictive as is the case in the European Union. Instead, Uzbekistan
is modeling its law on the existing biotechnology laws of CIS and Baltic
countries.
Although Uzbekistan participates in the Convention on Biological Diversity, it
is not a signatory to the Cartagena Protocol.
Uzbekistan has no uniform system of labeling including biotechnology. However,
In accordance with Uzbek legislation on protection of consumer's rights, all
products sold in the country must contain the following information in local
(Uzbek) language:
- Name of the product;
- Manufacturer's name and contact information;
- Ingredients and 'best before' date (if applicable);
- User's manual (if needed); and cautions (if any).
In 1999-2000 USDA's Cochran Fellowship Program organized two training courses
related to biotechnology for the local experts from the related ministries. In
addition, the United Nation's Office for Environmental Protection issued grants
to some Central Asian republics for Biotechnology-related projects. Reportedly,
only Uzbekistan and Turkmenistan did not get these grants, because the Governments
of these countries didn't apply for it. Reportedly, this grant is still
available for Uzbekistan, if the Government of Uzbekistan submits necessary
application.
Uzbekistan has no testing facilities for bio-engineered products. According to
the Institute of Genetics, which is working on the draft legislation, a request
for funding purchases of testing equipment has been submitted to the
government, the report said.
There is very little information on biotechnology published in Uzbek
newspapers. Over the past 10 years, only a handful of articles have been
published in the popular press. In general, the media does not cover this
issue. As a result, the public usually has no strong feelings one way or the
other about the issue, the report added.
Oxus Gold says govnt
plans not effected its Uzbek project
TASHKENT. August 11
(Uzreport) - Oxus Gold plc said there has been no
adverse change to Amantaytau-Goldfields's (AGF) operations in Uzbekistan, which
continues to operate normally. The feasibility study for the underground
sulphides project is still being evaluated and approved by the relevant Uzbek
State authorities and this process is expected to complete within the next
three months, the company's statement said. The company is aware that the Uzbek
government is proposing to cancel certain tax privileges granted to various
foreign investments. Under Uzbek law, AGF enjoys a 10 year protection against
adverse tax changes, which is not scheduled to expire until 2010, and the
company has been advised by its counsel that the proposed cancellation of
privileges will not apply to AGF. The company is sympathetic to the desire of
the Uzbek government to realize more revenue from the mining sector at a time
of high metal prices and has indicated its willingness to discuss appropriate
and equitable means of achieving this. Oxus Gold notes the recent developments
at the Zarafshan-Newmont joint venture and confirms that these developments are
specific to that particular joint venture and are not expected to impact on AGF's
operations. AGF continues to ship gold into the spot market on a regular basis.
The government of Uzbekistan adopted resolution and Amantaytau-Goldfields lost
some preferences. Earlier, the venture had preferential rate of royalties
payment and it was freed from payment of customs duties, payments for
amortization, tax on property and dividends.
Uzbek court opens
bankruptcy proceedings against Zarafshan-Newmont
TASHKENT. August 16
(Uzreport) - A
court in Uzbekistan has initiated bankruptcy proceedings against the local
joint venture of US gold miner Newmont Mining Corp., according to a statement
published on Wednesday in Uzbek state-run newspaper. The Zarafshan-Newmont
Joint Venture (ZNJV), 50% owned by Newmont and 50% by the Uzbek government, is
facing two tax claims for a total of US$48 million. The State Committee on
Demonopolisation said in a statement published in the Narodnoye Slovo,
newspaper of the Uzbek parliament, that the venture's creditors would meet on
19 September to discuss the matter. The statement said U. Narzullaev, employee
of territorial department of State Committee on Demonopolisation, appointed as
temporary manager.
Uzbekistan revokes
license of British firm
TASHKENT. August 16
(Uzreport) - Uzbekistan revoked a license held by Britain's Oxus Gold Plc. to
develop zinc and gold deposit in the south of the country, Reuters reported
quoting source in the government. The reports said the Uzbek president adopted
decision to revoke license of Marakand Minerals Ltd to develop Khandiza project
and transferred this right to Almalyk Mining and Smelting Combine (AGMK). AFX
reported quoting Marakand Minerals Ltd that the company is seeking
clarification after it received notification of the Uzbek government's decision
to super cede the previous decrees on the group's Khandiza project and their
intention to transfer the resource to AGMK, the state owned base metal
miner/smelter. The company and representatives of the British government have
in the past year received numerous assurances from senior government officials
of its ongoing involvement in the development on Khandiza.
In March, Marakand Minerals said its proposed Khandiza project joint venture
had been included in the Uzbekistan National Investment Program for 2006,
according to a Presidential Decree dated 15 November. The Khandiza deposit is a
volcanogenic massive sulphide deposit that contains zinc, lead and copper
sulphides and associated sliver and gold. Khandiza is located in southeast
Uzbekistan in the Surkhandarya region. The deposit was identified in 1957 and
was well explored during the Soviet era. By the end of 1974, 77,000 meters of
core drilling and 19,000 meters of underground exploration development had been
completed, together with a considerable amount of metallurgical test work on
bulk samples, enabling a Soviet Feasibility Study to be prepared. The project
was evaluated by Oxus Resources Corporation (Oxus) from 1996 until the
formation of Marakand in November 2003. A confirmation drilling programme (30
holes totaling 3,776 meters) was completed by Oxus in 2001. Marakand completed
its feasibility study in September 2004, which confirmed the project is
financially and technically robust.
Newmont seeks
arbitration over Uzbekistan's actions
TASHKENT. August 18
(Uzreport) - Gold miner Newmont Mining Corp. said it will take the government
of Uzbekistan to international arbitration in an effort to regain control of
its joint venture mining operation there. Denver-based Newmont announced its
intentions in a filing with the Securities and Exchange Commission. The mine
had been expected to sell about 90,000 equity ounces of gold during the second
half of 2006, but Newmont said in the filing that it doesn't expect to see any
of that money. Newmont owns 50% of the mining operation and said the book value
of its portion of the operation was about US$94 million. Newmont's share of the
gold was about 1.69 million ounces, or about five years of profitable
production at current gold prices, the company said. Newmont said it received notice
on August 14, 2006 that the Navoi Economic Court had accepted a request from
the Uzbekistan government to start bankruptcy proceedings against the joint
venture for alleged nonpayment of US$48 million in back taxes. Newmont said it
hadn't been notified about the proceeding before or that a hearing would be
held. The court ordered "supervisory measures" on the mine, meaning
normal operations, including the export of gold and the repayment of loans,
required the approval of the court-appointed temporary administrator, Newmont
said. The administrator oversees all operations of the mine, Newmont said. The
company also said Uzbekistan authorities have been conducting purported
criminal investigations related to the joint venture and Newmont's personnel.
But Newmont said it "believes that the purported criminal investigations
and the bankruptcy proceeding are part of an effort to effectively expropriate
the company's interest in the joint venture."
Main macroeconomic indicators for 1H 2006: Uzbek GDP grows by 6.6%
TASHKENT. August 18
(Uzreport) - The gross domestic product (GDP) of Uzbekistan grew by 6.6%
year-on-year in the first six months of 2006, State Statistics Committee of
Uzbekistan said in its report published in local newspapers. According to the
Committee, the economic growth has been achieved due to increase of the volume
of investments by 6.9%, industrial output – 9.7%, agricultural production –
7.2%, retail trade turnover – 11.6%, services – 13.3% and other sectors of
national economy. The report said that the volume of consumer goods production
grew 20% compared with January-June 2005. The volume of construction work rose
by 6.1%.
MTS, Uzdunrobita amend outstanding option
TASHKENT. August 21
(Uzreport) - Mobile TeleSystems OJSC (MTS), the largest mobile phone operator
in Russia and the CIS, announced on August 18, 2006 signing an amendment to the
outstanding option on the remaining 26% stake in Uzdunrobita. The company first
acquired a 74% stake in Uzdunrobita for US$121.0 million from two private
companies in August 2004. As it was announced at the time of the transaction,
MTS also signed a three year put and call agreement with all the existing
shareholders of the Uzbek company to purchase the remaining 26% stake for a
minimum price of US$37.7 million to become the sole owner of the company. The
amendment to the original option agreement eliminates the call option, yet
extends the exercise period of the put option to July 14, 2008. The purchase
price for the put option will be determined by an international investment bank
to be selected jointly by both parties within 10 days of the date of service of
a put notice. These changes were made in accordance with the wishes of all
sides to maintain and develop a mutually beneficial partnership as demonstrated
by the strong results of Uzdunrobita, MTS said. Uzdunrobita is the largest
mobile phone operator in Uzbekistan with approximately 894.8 thousand
subscribers as of July 31, 2006. The company holds GSM licenses for the entire
territory of the country.
Uzbekugol produces 1.7m tons of coal in 1H
TASHKENT. August 21
(Uzreport) - Uzbekugol (Uzbek Coal) joint-stock company increased production of
coal by 8.5% to 1.709 million tons in January-June 2006, including production
of brown coal roe by 2.8% and bituminous coal by 2.2 times, according to Uzbek
State Statistics Committee. According to data of State Committee on Geology and
Mineral Resources, Uzbekistan possesses 1.9 billion tons of coal reserves.
According to forecasts, the resources comprise over 5.7 billion tons of coal.
The country is implementing the programme for further development of coal
industry for 2002-2010. The programme envisages re-equipment and reconstruction
of Angren and Apartak coal mines. Total investments will make up US$254.2 million,
including US$15.1 million of foreign credits. Re-equipment of Angren mine will
allow increase production of coal from 2.1 million tons in 2001 to 7.8 million
tons in 2010. The cost price will decrease from U$10.38 in 2001 to US$7.85 in
2010. German Krupp Ferdertehnic GmBH and MAN Takraf are participating in
realization of this project. The German banks are financing the project.
Reconstruction of Apartak mine stipulates construction of loading railway
station. The production of coal in mine is projected to grow from 214,000 tons
in 2001 to 1.5 million tons in 2010. The cost price will decrease from U$10.47
in 2001 to US$6.66 in 2010.
Foreign trade turnover
of Uzbekistan grows by 4.6% in 1H 2006
TASHKENT. August 21
(Uzreport) - Foreign trade turnover of Uzbekistan made up US$5,059.3 million in
the first half of 2006, State Statistics Committee of Uzbekistan said. The
report said that the Uzbek foreign trade turnover figure grew by 4.6%
year-on-year compared with the same period of 2005. The aggregate volume of
exports increased by 5.2% and comprised US$2,971.2 million. The volume of
imports made up US$2,088.1 million, which is 3.6% more against the first half
of 2005. According to official statistics, Uzbekistan achieved positive foreign
trade turnover balance worth a total of US$883.1 million in the reporting
period.
Chinese Citi Pacific
Ltd, UzKimyoSanoat launch soda ash production
TASHKENT. August 21
(Uzreport) - Chinese
Citi Pacific Ltd and UzKimyoSanoat (Uzbek Chemical Industry) have launched the
production of soda ash in Uzbekistan. The new Kungrad Soda Plant cost the
founders US$100 million, a source in UzKimyoSanoat told Interfax. The projected
production capacity of the plant is 100,000 tons of soda ash yearly. In
accordance with the contract signed with UzKimyoSanoat, Citic Pacific Ltd did
the designing and turn-key construction of the technological part of the plant
worth US$32.3 million. The technological part of the project was funded by a
loan of the Industrial and Commercial Bank of China (90% of the contract cost)
with the insurance provided by the Chinese Export and Credit Insurance
Corporation, and a loan of the UzPromStroyBank (Uzbek Industrial Construction
Bank, 10% of the contract cost) guaranteed by the Uzbek government. General
construction works were performed by local construction companies at the
expense of UzKimyoSanoat's own funds. According the source in the agency, the
production of Kungrad Soda Plant will be capable of covering both the domestic
demand for the soda ash, and the export of soda ash, hydrate of sodium, and
table salt. At this time, Uzbekistan's domestic demand for soda ash is
estimated at 60,000-70,000 tons yearly. The main consumers are companies of the
household chemical industry and the producers of construction materials,
including the producers of different types of glass. The resource base for
Kungrad Soda Plant is Barsakelmes deposit of table salt (explored reserves
estimated at 131 million tons of table salt containing 97% of NaCl) and
Jamansay deposit of limestone (explored reserves estimated at 70 million tons)
located in Karakalpakstan Republic.
Uzbekistan is on
seventh place on mobile users' number in CIS
TASHKENT. August 22
(Uzreport) - Uzbekistan is on the seventh place on number of mobile users among
the Commonwealth of Independent States (CIS). According to CIS Statistic
Committee, Russia leads on number of mobile subscribers' base in CIS with 140.3
million users and it is followed by Ukraine (35.9 million) and Kazakhstan (6.6
million). Belarus has some five million users, while 2.9 million people use
service of mobile companies in Azerbaijan. Georgia has 1.9 million mobile users
and Uzbekistan has 1.7 million users. Moldavian companies serve 1.2 people in
the country. Kyrgyzstan and Armenia were one of the countries with the lowest
number of subscribers in CIS with 700,000 users, followed by Tajikistan with
600,000 users and Turkmenistan (100,000 users).
For more information on Uzbekistan,
visit BISNIS online at:
http://www.bisnis.doc.gov/bisnis/country/Uzbekistan.cfm
BISNIS
(www.bisnis.doc.gov) is part of the U.S.
Commercial Service (www.export.gov)