Uzbekistani gov’t sells huge stake in Almalyk — Increased production and leaner operations are expected

The government of Uzbekistan plans to sell a 40% stake in the Almalyk mining and metallurgical plant, one of the largest copper producers of the former U.S.S.R.

The plant produced 100,000 tonnes of copper cathode and wire last year at a loss of US$40 million, though, as of June 1997, strengthening copper prices had enabled it to turn a profit of US$2 million.

Feed for the plant is supplied primarily by the nearby Kalmakyr and Sary Cheku open-pit copper mines, with supplementary feed imported from Russia and Mongolia. At current production rates, the mines will supply the plant for the next 80 years. The plant also produces molybdenum concentrate and refines gold and silver. Most of the plant’s output is exported; sales increased to US$137 million last year from $11.9 million in 1993.

Although the operation looks promising, the government concedes it needs to be upgraded and, to that end, is prepared to spend upwards of US$1 billion.

At the Kalmakyr open pit, plans call for the installation of a new conveyor system as well as a $100-Million upgrade to the mill. At the plant itself, the government intends to add two new crushing mills and a flotation cell.

With the upgrades, copper and precious metals processing at the plant could increase by between 50% and 70% by 2007. The milling complex can currently process 29.2 million tonnes per year.

The government intends to incorporate the plant into a public stock company before July. Shares will sell for about US$16.

The plant employs more than 18,000 people.

The Uzbekistani government will retain a 51% interest in the plant and put 40% of the company on the block. The company’s employees will own 4%, and 5% will be floated on the stock market. Companies involved in the tendering process include Daewoo of South Korea, Gerald Metals of the U.S. and Glencore International of Switzerland.

— with files from Interfax News Agency.