On December 2, 2024, President Shavkat Mirziyoyev, having familiarized himself with the programs for the transformation of metallurgical enterprises and plans for 2025, emphasized that serious changes must be performed this year in order to increase the competitiveness of complexes in the global market.

The head of state also noted that the key tasks are reducing costs, fully digitalization of processes, attracting of investments from international markets, introducing of new technologies and automation of production.

What work is being carried out in this direction at the Almalyk Mining and Metallurgical Complex ? In what areas is the transformation taking place? What does this concept even mean? Answers to these and other questions are contained in the information provided by the Head of the Department of ESG and International Ratings, Head of the Project Office for Transformation, ESG and International Ratings Utkur Turaev

In simple terms, transformation is a profound change in something: structure, properties, and sometimes form. In other words, this is a serious transformation of processes that leads to qualitatively new results. Under healthy competition, no enterprise can afford stagnation - development and renewal must be constant.

The AMMC transforms in five main areas.

Transfer to international financial reporting standards.

Together with Ernst & Young, the Complex  implemented reporting standards for international financial instruments. Financial statements were prepared in accordance with IFRS standards for 2019–2023. Based on the results of the work, the S&P Global Ratings agency assigned the Complex  a credit rating of “B+”, and Fitch Ratings assigned it a “BB–” with a stable outlook.

Attraction of international finance.

In accordance with the requirements of international financial institutions and export credit agencies, an operational financial model was developed jointly with Deloitte and Touche. In addition, Grant Thornton Valuation conducted an assessment of the market value of key assets according to international standards. These efforts resulted in $1.9 billion in direct leveraged funds, reducing financing costs by $125 million.

Improvement of corporate governance.

Within the frame of the Presidential Resolution No. ПП-4611 dated February 24, 2020, aimed at the transition to international financial reporting standards, a project office for transformation, ESG and international ratings was created. Its tasks include the implementation of IFRS in accounting, preparation of financial statements and implementation of strategic development initiatives.

Strategy and operational efficiency.

SRK Consulting has recalculated mineral reserves in accordance with the JORC Code (2012). Together with the Canadian company HATCH, a development strategy for the Complex  until 2030 was developed. KPMG AUDIT conducted a forensic audit to assess the effectiveness of procurement procedures and the anti-corruption system.

Jointly with PwC Central Asia and Caucasus, processes in the copper cluster (Kalmakyr mine, MOF, MPZ) were analyzed. A roadmap is being developed and implemented to improve operational efficiency in five areas: mining, enrichment and smelting, asset management, resource consumption (fuel, energy, materials), and organizational structure optimization.

Risk management and compliance.

Ernst & Young prepared job descriptions for employees of the compliance and financial risk and covenant management service, organized their advanced training, developed risk maps and implemented 18 internal regulatory documents.

For reference: the Complex  received international certificates:

ISO 50001:2018 - Energy Management System;

ISO 14001:2015 - Environment Management System;

ISO 45001:2018 - Occupational Health and Safety Management System.

As part of the sustainable development direction (ESG), a five-stage certification is carried out in cooperation with the Copper Mark association to obtain the status of “Responsible Copper Producer”. To date, the Independent Assessment and Copper Supply Chain Audit stages have been completed. Obtaining of this certificate will allow the Complex  to sell copper products on European markets at a higher price and attract “green” investments.

In addition, in February of this year, the international rating agency Sustainable Fitch assigned AMMC an ESG rating of 56 points - the highest score among all mining and metallurgical enterprises in the republic.

In the field of digitalization, the automated information system “1C:ERP” has been implemented for accounting, financial reporting and data consolidation. This allowed to reduce the time for collecting information and preparing reports by 50%, reduce the number of errors, and optimize the process of generating annual and additional requests for raw materials, equipment, and spare parts by 25%. The remaining inventory in warehouses decreased by 15%. The economic effect from the implementation of the system is estimated at 9.1 billion UZS per year.

As part of the automation of the fuel and lubricants (F&L) management system, the process of providing consumers with F&L through 34 tanks with a total volume of 4.5 thousand cubic meters, 15 filling stations and 26 fuel trucks has been transferred to online mode. Now drivers refuel using an ID card without the operator’s involvement. This allowed to eliminate corruption risks, reduce service time by 3 times and save 6.4 thousand tons (89 billion UZS) of diesel fuel.

The copper concentrator has 27 digital strain gauge balances installed, which has made it possible to achieve 99.8% accuracy in measuring ore mass in the technological process. As part of the automation of processes at mono-section No. 7, 37 dosing pumps and 5 new reagent tanks were installed. This resulted in a 5% reduction in reagent consumption. A system for monitoring of the ore level in the storage hoppers was also introduced, which reduced the number of mill downtimes by 90%.

Plans for 2025

This year the Complex  faces ambitious goals. In particular, it is planned to attract grant funding from the Asian Development Bank to develop a climate strategy. Financial statements shall also be prepared in accordance with the new IFRS standards – S1 and S2.

As part of obtaining of the Copper Mark certificate, an “Improvement Plan” will be developed by May, and the “Responsible Copper Producer” certificate itself is planned to be obtained by October of this year.

By improving operational efficiency, ore production volumes will increase to 2 million tons, and energy consumption will be optimized.

The placement of the first Eurobonds is planned.

Preparations will also begin to obtain the international ISO 27001 certificate for information security.

The engineering school of AMMC shall be certified according to the dual education system, corresponding to German standards.

By 2030, a climate strategy shall be fully developed, within the framework of which it is planned to reduce greenhouse gas emissions by 15% and plant 370 thousand trees annually.

At the Yoshlik I and Kalmakyr mines, digitalization of business processes using the Mining and Transport Complex Automated Control System will increase the volume of transportation of rock mass by 10%.

The implementation of the ERP, IMP and MES systems will increase net profit by 2% and reduce costs by 4% - these are some of the Complex  priority goals.