Uzbekistan’s leading gold mining company, Navoi Mining and Metallurgical Company (NMMC), has received its inaugural international credit rating from S&P Global Ratings. The company was awarded a long-term credit rating of ‘BB-‘ with a ‘Stable’ outlook, aligning with Uzbekistan’s sovereign credit rating, as stated in a press release on July 5.
Global Ranking and Production
In the first half of 2023, NMMC ranked fifth among the world’s top gold producers, according to Kitco, a Canadian trade media outlet. Notably, S&P Global Ratings assessed NMMC’s stand-alone credit profile (SACP) at ‘bb+’, the highest grade ever achieved by a company from Uzbekistan.
Operational Excellence and Financial Stability
S&P Global Ratings emphasized NMMC’s status as the fourth-largest gold producer globally, with a production output of 2.9 million ounces in 2023. The agency commended the company’s low production costs, substantial reserves, and prudent leverage metrics, with funds from operations (FFO) to debt consistently exceeding 60%.
At the end of 2023, NMMC’s total cash cost (TCC) for gold production was $745 per ounce, among the lowest for companies rated by S&P Global Ratings. The agency anticipates that favorable gold prices will continue to bolster NMMC’s robust operational and financial performance in the coming years.
Leadership Remarks and Strategic Vision
Eugeny Antonov, First Deputy CEO for Transformation at NMMC, remarked on the significance of the rating: “Securing the Company’s first international credit rating is a pivotal milestone in the development of one of Uzbekistan’s largest enterprises. It enhances our access to international capital markets, strengthens our global reputation, and validates the successful reforms and ongoing transformation within both our country and Company. The ‘bb+’ SACP assessment from S&P Global Ratings is a historic achievement for Uzbek enterprises, reflecting our stable financial strategy and the high level of confidence international financial market participants have in our future plans.”
Economic Contribution and Future Projects
As the largest contributor to the Uzbek budget, NMMC plays a crucial role in the country’s economy, contributing 6.3% to the GDP. Uzbekistan, the fastest-growing economy in the region, recorded a GDP growth rate of 5.5%. The nation is undergoing extensive structural reforms to promote economic diversification and liberalization, with NMMC also undergoing significant transformations to adopt international best practices.
Expansion Plans and Privatization
Uzbekistan’s President Shavkat Mirziyoyev has outlined plans for NMMC, which include implementing 19 projects worth $3.8 billion by 2030, aimed at increasing gold production by 50% to 155 tonnes annually. Additionally, President Mirziyoyev has advocated for the privatization of NMMC through an initial public offering (IPO), which he hopes to see realized next year. The company, as mentioned in a 2021 interview with its CEO, is nearly prepared for this transition, pending government action.
Uzbekistan has successfully privatized its cotton sector and continues to liberalize its economy, driving sustained GDP growth of around 6% annually.
