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Topical issues


29 May 2019

Investment proposal

on the realization of Project “Comprehensive development of the Uch-Kulach Polymetallic Ore Deposit with the construction of a concentrator and a lead plant with a capacity of 30 thousand tons of lead metal per year”

 

Project Name

“Comprehensive development of the Uch-Kulach Polymetallic Ore Deposit with the construction of a concentrator and a lead plant with a capacity of 30 thousand tons of lead metal per year”.

Project Objective

Organization of manufacturing of non-ferrous metals (zinc, lead, cadmium, bismuth and silver), through the construction of mining and lead containing products processing plant.

In order to create a metallurgic cluster for advanced processing of polymetallic ores and man-made waste, there is a possibility of selling to a potential investor the state’s stake of shares of JSC "Jizzakh Battery Plant".

Field/industry

Ore mining and smelting

Project Schedule

The period from the beginning of construction to initial operation of the project, from the time of attracting investments makes 2 years.

The period to reach the project capacity is 5 years.

Project implementation location

The construction area is located in the Republic of Uzbekistan in Farish district of Jizzakh region of the Republic of Uzbekistan, 65 km away to the North-West of the regional center of Jizzakh.

Project Stakeholders Information

Initiator

National Agency for Project Management under the President of the Republic of Uzbekistan.

Associate contractors

1.   Ministry of Economy and Industry

2.   State Committee for Geology and Mineral Resources.

Lender

Not available

Total project cost (forecast)

172.93 million US dollars.

Assumed sources of financing

Proprietary funds and loans

The financing structure is to be determined by the investor.

Volume of investments

172.93 million US dollars.

Capital expenditures

(mln. US dollars)

Construction and installation works – 72.71;

Equipment – 90.66;

Others – 9.56.

Expected payback period

10.5 years

Financial results

Specified in Annex No. 1.

Characteristics of the products to be released

1.   Lead pig according to GOST 3778-98.

2.   Zinc metal according to GOST 3640-94.

3.   Copper cathode according to GOST 546-2001.

4.   Refined bismuth according to GOST 10928-90.

5.   Cadmium metal according to GOST 1467-93.

6.   Silver ingots according to O’zDSt 611:2009.

7.   Sulphuric acid according to GOST 2184-2013.

Designed capacity

 

The minimum capacity of the mining and processing complex is 500 thousand tons of ore per year.

The minimum throughput performance of lead-containing products for the period under review (17 years) is 1.092 thousand tons. 

The volume of main products for the period under review (tons):

‒ lead pig – 420 371.2;

‒ zinc metal – 153 024.5;

The volume of by-products for the period under review (tons):

‒ copper cathode – 18 958.1;

‒ refined bismuth – 2 203.4;

cadmium metal – 1 083.9;

‒ silver bullion191.398;

– sulphuric acid – 567 413.2.

Contribution of the project initiator

The initiator proposes to consider the possibility of assisting in:

1.  Obtaining all required permits from the state authorities.

2.  Providing existing buildings and structures at zero cost.

3.  Ensuring technical conditions to provide the industrial site with electricity, fuel and water.

4.  Arranging construction of necessary external utilities.

5.  Granting tax exemptions and preferences as well as exempting from customs duties and fees.

6.  Structuring the processing of minor materials by involving organizations of the Republic of Uzbekistan.

7.  Providing all the necessary original data.

8.  Granting permission for construction and installation works with the concurrent design.

 


Information about the Project Initiator

 

Full name

National Agency for Project Management under the President of the Republic of Uzbekistan.

Address, contact details

Legal address:

Republic of Uzbekistan, Tashkent, I.Karimov street, 1.

Tel: +998 71 231 79 27

E-mail: info@napm.uz

www.napm.uz

Contractor details

Sabir Flyusovich Yasoveev

Project Manager

Tel: +998 71 231 63 84

E-mail: s.yasoveev@napm.uz

 

 

GENERAL INFORMATION


Number of jobs created

Jobs created – 904, including:

- managers – 52;

- specialists – 27;

- workers - 825.

Environmental Impact of the Project

Environmental requirements are set by environmental impact project of the State Environmental Committee of the Republic of Uzbekistan.

Information on the site for the construction of enterprise

Mine:

Up to date, the mine is exposed to the mountains. 155.0 m. Mine area – 99 ha, depth – 150 m, width –900 m, length – 1 100 m. 

To ensure stable operation of the mine with the design capacity for ore mining, it is necessary to conduct capital mining and overburden mining operations of 1 125 thousand m3. The mine has been suspended since 2006. 

«Skip» vertical shaft design depth – 720 m., actual depth – 720 m.

«Auxiliary» vertical shaft design depth – 728 m., actual depth – 728 m.

«Ventilation» vertical shaft design depth – 508 m., actual depth – 515 m.

Ramp access with a design length – 2 889 m., actual – 406 m.

Existing facilities:

Concentrating plant (removed from operation since 2009).

-      main building ‒ the foundation blocks of the frame are installed;

-      reagent preparation housing ‒ solid bottom is performed, part of a brick protection wall, part of column footings and half of wall panels are installed;


-      receiving hopper – except for steel structures of the hopper the building is almost completely finished;

-      conveyor galleries with a transfer group – fully implemented except for wall panels and installation of equipment;

-      open thickener with a diameter of 30 m – underground part and ventilation trunk are performed.

Tailing dump. Total volume of existing tailing dump of priority I at the elevation of filling is 2 895 thousand m3.

According to the capacity of concentrating plant, the capacity of the existing tailing dump will enable tail storage for 7 years

Existing infrastructure

The mine is connected to the regional centre by an asphalt road and railway.

Administrative and living quarters, auxiliary facilities of water supply and sewerage: workshop, vehicle shed, laboratory building, gatehouse – existing. The listed buildings are subject to restoration through capital overhaul.

The source of potable water supply of plant site is the existing underground water intake “Uzun-Kuduk”.

Reconstruction is required.

The source of industrial water supply is the network of reverse water supply of the tailing dump – a water conduit with a diameter of 150 mm and the water of the mine water drainage – a water conduit with a diameter of 200 mm. Reconstruction is required.

Reconstruction of existing wastewater treatment facilities is required.

Gas supply is provided from medium pressure gas pipeline (P=3 kg/cm2) DN 80 mm. Reconstruction of existing pipeline with a length of 2 700 m is required. The source of electric power supply is the existing substation of 110/10 kV MSDS "Uch-Kulach” which is subject to reconstruction.

Required infrastructure

Construction of two 10 kV overhead lines to the facility is needed.

Upcoming construction and installation work

Implementation of works on the reconstruction of utility systems as well as the construction of buildings and facilities on the basis of the developed design documentation are needed.

Design and estimate documentation

Design and estimate documentation is developed on the basis of the existing rules and regulations of the Republic of Uzbekistan in compliance with the Decree of the President of the Republic of Uzbekistan No.УП-5577 dated 14.11.2018.


 

MARKET ANALYSIS, PRODUCT DESCRIPTION

MARKETING RESEARCH

 

Expectant sales markets and their shares:

Domestic market

Lead– 12 % of the production volume.

Export market

 

Lead – 88 % of the production volume.

Zinc – 100 % of the production volume.

Product cost

(USD)

 

No.

Product name

 

Unit of measurement

Export Price

 

Domestic market price

1

Lead

ton

2 000

2 000

2

Zinc metal

ton

2 476.2

-

3

Refined bismuth

ton

10 100

-

4

Cadmium metal

ton

2 500

-

5

Cathode copper

ton

-

6 500

6

Silver

gr.

0.45

-

7

Sulphuric acid

ton

-

22

Demand for

raw materials

(tons per year)

 

1.       Own raw materials:

-     Ore from the Uch-Kulach deposit - 500 000.

2.       Purchased raw materials from Almalyk MMC JSC:

-     lead-zinc concentrate -– 29 637.6;

-     dust from electrostatic precipitators– 5 624.8;

-     lead-bismuth sludge – 8 808.2;

-     lead cake – 22 403.

Estimated cost of raw materials

(USD / ton)

 

1.       Own raw materials:

-     Ore from the Uch-Kulach deposit – 1.5 – 2.

2.       Purchased raw materials from Almalyk MMC JSC:

-     lead-zinc concentrate – 788.1;

-     dust from electrostatic precipitators – 797.9;

-     lead-bismuth sludge – 739.7;

-     lead cake – 523.1.

Provision with raw materials

1. The reserves for the Uch-Kulach deposit as of 01.01.2018, for open-pit mining in the В+С1 category are:

Balance ores – 9 123 thousand tons

-     lead – 261.7 thousand tons;

-     zinc – 274.7 thousand tons;

Out of balance ores – 46 thousand tons

-     lead – 0.4 thousand tons;

-     zinc – 0.9 thousand tons;

These stocks are accepted as industrial ones for mining.

2. For underground mining outside the pit’s contour, the reserves are:

Balance ores – 67 790 thousand tons.

-     lead – 1 473.5 thousand tons;

-     zinc – 1 944.6 thousand tons

Out of balance ores – 4 192 thousand tons.

-     lead – 33.2 thousand tons;

-     zinc – 64.1 thousand tons

3. The required amount of raw materials to be purchased from Almalyk MMC JSC will be secured through the contracts concluded and the relevant decisions of the Government of the Republic of Uzbekistan.

Main competitors

 

The main competitors are:

-     Almalyk MMC JSC (Uzbekistan) - production of zinc and copper;

-     Kazzinc JSC (Kazakhstan) - production of copper, zinc and lead.

Key competitive advantages

 

To date, there are no refined lead producers in the Republic of Uzbekistan. Lead-containing products and technological waste are sent for recycling to the Republic of Kazakhstan. The launch of a production facility will allow to organize recycling of industrial waste thus getting products with high added value.

Sales structure by target consumer groups

Finished products will be sold through the Uzbek Commodity Exchange and for export under import contracts.

 

Pricing strategy

 

Prices are taken based on average prices in the domestic and foreign markets.

Availability of potential customers

Finished products will be sold through the Uzbek Commodity Exchange and for export under import contracts.

Availability of marketing research

 

Marketing research have been carried out on the basis of the demand for products in the Republic of Uzbekistan and on the world market.




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