Shareholders and investors

Pursuant to the decision of the President of the Republic of Uzbekistan dated December 21, 2015 N PP-2454 “On additional measures to attract foreign investors in joint-stock companies”, as well as for a broad involvement in joint-stock companies of foreign investors, creating favorable conditions for their active participation in corporate governance , modernization, technical and technological re-equipment of production, organization of production of high-quality, competitive products and their promotion on external markets, a radical reduction of the presence of the state in the economy through the reduction of state assets and stakes in joint stock companies by the JSC “Uzbekugol” put up 15 percent of the shares JSC “Shargunkumir” in the amount of 1054413 pieces  www.elsavdo.uz/ru/prodazha on the site for the implementation of foreign investors.

Phone (99871) 150-39-80 (switch) service dealing with property and securities Ravshanbek Golibbek Ravshanbekovich.

FOR THE ATTENTION OF COMPANIES’ AND FIRMS’ DIRECTORS!
The bid is announced for the implementation of the project on complex integrated information system for computerization of financial accounting and reporting, personnel management, operational and industrial-technological activity of JSC “Uzbekugol”.

(PDF, 65 Kb).

Proposals on realization of government stake in JSC “Shargunkumir” to strategic investors.
(PDF, 250 Kb).

Investment proposal

1.         JSC “Uzbekugol”

Joint-stock company “Uzbekugol” (JSC “Uzbekugol”) which is the part of joint-stock company “Uzbekenergo” (JSC “Uzbekenergo”) more than 67 years develops Angren field of brown coal and coal deposits in Surkhandarya area.

In recent years, coal extraction is carried out with the annual growth rates of not less than 110%. The main consumer of coal is the power sector – 85 %. The demand for solid fuel is formed also by the enterprises of industry, social and public spheres and population.

2. Organizational chart

struktura_en

3. Historical notes

Having large coal reserves, Uzbekistan has long time imported black gold from other areas. These transportations of coal, oil and other chemical fertilizers was combined expensive for the country and significantly increased the cost of products produced in the country. Millions of coal tons required to Central Asia were coming from the Kuzbass, Vorkuta and Donetsk. At that the consumption of coal was also significant at combustion in the furnaces of locomotives during transportation. All this created the urgent need for the creation of own fuel base in Uzbekistan.

In 30-ies geological exploration works have been started on the territory of Uzbekistan, within the frames of which large reserves of brown and hard coal, deposits of lead and fluorspar, deposits of polymetals and others were discovered.

Since 1938, the dozens of researchers of natural resources have visited the valley of the river Angren. The history of Angren mining area itself begins from the opening of brown coal by D. M. Bogdanovich in 1933 at the search of refractory clays. However this discovery has not been given proper value due to existing opinion among geologists about the insignificant reserves of coal and the difficulty of its delivery to the city of Tashkent by animal-drawn transport. But already in 1940 due to the shortage of fuel in the republic, the government of Uzbekistan allocated funds for the production of geological exploration for coal in Angren area, which was headed by G.S.Chikryzov. The experienced geologist, Georgiy Stepanovich Chikryzov had explored the considerable part of the area along the river Angren, had defined fuel reserves, proved prospects of its industrial development, put forward the idea of open-cut method of coal found there and achieved its implementation. From that time the development of one of the largest coal basins in the east had begun.

The formation of coal industry of Uzbekistan was marked by the beginning of industrial development of the Angren field – the largest in Central Asia, opened before the Second World War.

Field development began in 1940-1943 by underground method with the laying of six mines. The construction of coal mine was started in 1941. In 1948 the Angren section was put into operation, and this date is considered to be the beginning of the development of Uzbekistan coal industry.

Today the joint-stock company “Uzbekkumir” (JSC “Uzbekugol”) of the joint-stock company “Uzbekenergo” (JSC “Uzbekenergo”) develops Angren field of brown coal, coal deposits in Surkhandarya area.

4. Investment activity

For reasons of increasing the extraction and sale of coal, currently, in JSC “Uzbekugol” the program of modernization, modification of technical and technological re-equipment of production is provided for 2014-2018, providing for the growth of production in 2 times, stripping – in 3 times, that requires the significant increase in the volume of repairing works and purchase of spare parts.

The main directions of coal industry enterprises development are: the implementation of the program on further improvement of working conditions, improvement of mining operations safety, reduce of accidents and injuries in the coal industry, introduction of new advanced technologies in production, implementation of investment projects aimed at modernization of production.

The important task remains the maintenance of investment contributions level that gives the creation of new production capacities of the industry. JSC “Uzbekugol” carries out the modernization and rapidly increases the production.

Investment activity of JSC “Uzbekugol” is defined by the Decree of the President of the Republic of Uzbekistan No.ПП-2264 dated 17.11.2014 “On the investment program of the Republic of Uzbekistan for 2015” and the Decree of the Cabinet of Ministers of the Republic of Uzbekistan No.161 dated 6.06.2014 “On approval of the Program of modernization, technical and technological re-equipment of coal industry enterprises and its balanced development for the period of 2013-2018”, according to which the implementation of the following investment projects is planned:

Slides:

1.         The project “Construction of “Apartak” section”. The aim of the project is bringing the production capacity to 1,0 mln.tons of coal extraction per year. Project implementation period – 2016-2018.

2.         The project “Modernization of “Shargunkumir”.  The aim of the project is bringing the production capacity to 900 thousand of coal extraction per year. Projectimplementationperiod – 2015-2018.

3.         The project “Renovation (replacement) of obsolescent and old-fashioned equipment”. The aim of the project is the acquisition of basic technological and auxiliary equipment instead of old, worn-out quarry and mining and transport equipment for elimination of the delay in stripping works and the implementation of the established parameters of coal extraction in “Angren” section. Project implementation period – 2015-2018.

4.         The project “Modernization of railroad facilities of JSC “Uzbekugol”. The aim of the project is the elimination   the delay in the volumes of stripping works and relief of the landslide.  Project implementation period – 2015-2018.

5.         The project “Maintenance of JSC “Uzbekugol” production capacity”. The aim of the project is the provision of the increase in equipment productivity for the implementation of planned volumes of stripping works and coal extraction. Project implementation period 2015-2018.

Technical re-equipment of “Angren” section is actively conducted with the introduction of cyclic-flow technology on the production of mining and stripping works, updating of existing mining and transport equipment on the basis of advanced technologies and highly efficient equipment with bringing of production capacity of the section to 6.4 million tons of coal per year.

The government of the Republic of Uzbekistan pays special attention to the implementation of new modern technologies in production, so the project of CDTN (Corporate data transmission network) and AISCDC (automated information system of centralized dispatcher control) are included in the Decree of the President of the Republic of Uzbekistan No. 2158 dated 03.04.2014 and implemented in JSC “Uzbekugol”. Thanks to these projects today not only the production process, but also the control for the implementation of all novelties and innovations are improved.

Sales and distribution of solid fuel

In the preparation for the winter period in JSC “Uzbekugol” the activity on the distribution of solid fuel to budget, social and communal areas and to the population has been regulated and normalized.

The works on the creation of unified electronic database of coal receivers are implemented, which will significantly reduce the time of customer service in territorial distribution centers of the company. During the seasonal periods from August to November, the discharge of coal continues till the last customer. The shipment of fuel from the warehouses is arranged on weekends and holidays.

Coal supplies during the heating season are planned so that the warehouses of the company always have sufficient quantities of fuel, despite the increased demand of the population.

For timely response to consumer complaints on quality of supplied coal in the executive apparatus of JSC “Uzbekugol” the “hot line” has been arranged. In case of complaints on the quality of shipped coal, received by the company or through hot line the commission is mandatorily established. Certain measures are taken to eliminate the identified shortages.

Territorial distribution centers

Currently in all areas of the Republic and in the Republic of Karakalpakstan, 14 territorial distribution centers with 72 branches in the country regions have been established, implementing the distribution of coal products to population and budget organizations, equipped with all the required facilities: warehouses and administrative and household buildings, motor mechanisms and special equipment.

For the purposes of provision the population and budgetary institutions with solid fuel the Cabinet of Ministers of Uzbekistan with its resolution dated July 2, 2015 approved additional measures on the complex organization of production and the distribution centers of JSC “Uzbekugol” In accordance with the document the coal to the population of Uzbekistan will be sold in the form of bricks.

The government has established the procedure according to which the sale of coal bricks to the population and budget organizations is carried out through the territorial distribution centers of JSC “Uzbekugol” and their branches.

JSC “Uzbekugol” creates also the necessary production capacities on the production of coal bricks with the attraction of credit funds of JSCB “Uzpromstroybank” for construction and installation works.

For timely and quality provision of the population and budgetary sphere with coal bricks 31 coal brick plants with the annual capacity of 240 thousand tons have been established in 8 areas (Andijan, Namangan, Fergana, Tashkent, Samarkand, Navoiy, Surkhandarya and Khorezm) and in the Republic of Karakalpakstan.

The coal producing company of Uzbekistan is entrusted with the responsibility on timely supply of coal of required marks for the production of coal bricks. (for the production of coal bricks – BOMSSH 20/80- with ash-contents of 60%, 30%).

Retail price for 1 ton of coal bricks from July 1, 2015 is established in the amount of 238 thousand soums.

Development prospects

In short term perspective, due to the increase of stripping works the volume of simultaneously extracted minerals stored in stockpiles are accordingly increased in 3-4 times. This primary and secondary kaolins (10.5 million tons per year), limestones (4 million tons per year), pebbles (9 million tons per year). It is advisable, with a huge economic effect, to use the products in cooperation with enterprises and organizations of other ministries and agencies as well as with private entrepreneurs for joint production of construction industry products (cement, brick, ceramic and facing tiles) as well as of refractories, insulators, ceramics articles and other products.

The program of modernization, technical and technological re-equipment of the coal industry, in accordance with the Decree of the Cabinet of Ministers of the Republic of Uzbekistan No. 196 dated 04.06.2002, the formation of conditions is provided ensuring the increase of reliability of coal-producing industry enterprises functioning, the achievement of stable production, allowing to use the existing potential of the industry more effectively to meet the growing needs of electrical energy industry, population, public sector institutions and other sectors of the economy in solid fuel.

The development of Angren field by underground method is planned, by discovering new coal plants and coal mines. In perspective for 2016-2018, it is planned to expand the fields of mine No.9 and the development of “Nishbash” area.

In perspective there is also the development of other coal fields located in Fergana valley (Vuadil field) and field in the Republic of Karakalpakstan  and Western Kyzyl Kum (Navoiy).

8. New production sites

In compliance with the modernization program in JSC “Uzbekugol” large production sites have been put into operation, among them there are:

– the complex of cyclic-flow technology (CFT -1) on loading and transportation of overburden rocks and their laying in heaps;

– in test mode the complex of cyclic-flow technology CFT -2 was put into operation.

– the assembly of CFT-2 is being continued the start up of which is planned to be in May 2016. The simultaneous start up of three lines will allow to bring the production capacity on loading and transportation of overburden rocks from 10 to 15 mln.m3.

– the complex on sorting and loading of coal to rail-roads cars “Djigiristan” with the project capacity of 6,5 mln.tons/year.

For 2014 JSC “Uzbekugol” extracted 4 398 thousand tons/year, the excavation of overburden rocks made up 18 779, 7 thousand cubic meters/year, in future, with the gradual increase of overburden rocks excavation and coal production to the project values. The planned growth of coal extraction to 11 million tons/year will provide the increase of its share in fuel and energy balance from 5% to 20% and the annual saving of natural gas in general, by the enterprises of JSC “Uzbekenergo” by converting boilers on year-round burning of coal in the amount of 2.0 billion cubic meters/year.

                                   9. Localization program and industrial cooperation

The introduction of new production facilities, as well as the development of a range of measures on the improvements of management control of the sector and its divisions, improvement of technology of coal extraction and technological transport control, rational use of FER (fuel and energy resources), measures on the marketing and sales of products will require 4 fold increase in costs for acquisition of spare parts and mechanisms. Therefore, in our work we pay special to import substitution, which includes:

– the expansion of products output by the localization program;

– intra and inter-industrial cooperation.

7.1. At the branch “RGTO branch” the localization program of production is implemented for ready products, spare parts, components and steel structures for mining transport and mining equipment, aimed at solving the following tasks:

– providing coal mining enterprises of the industry with spare parts, components, steel structures at the expense of own production;

– providing the growth of production of localized products, reducing dependence on import;

– economical and rational use of currency funds.

7.2. In this direction in recent years, some progress has been achieved: every year new positions of spare parts, components, parts and steel structures are adopted. Thus,

– in 2012 175 items on these types of products were produced for the amount of 3 208,86  million soums;

– in 2013 – 198 items for the amount of 3 290,73 million soums;

– in 2015, the plan – 217 items for the amount of 3600,00 million soums.

For 10 months of 2015 it is expected to produce and distribute the localized products for the amount of 3 026,11 million sums.

According to the forecast until the end of 2015 the production of localized products is expected for the amount of 3 600,0 million soums, at that, the expected effect of import substitution (alternative value of similar products import) will make up 1.42 million US dollars, the localization level makes up 35%, the saving of foreign currency – 0.49 million US dollars.

                         

7.3. According to intra-industrial and inter-industrial cooperation considering the results of conducted Republican industrial fair and Cooperation exchange under the contracts concluded with the enterprises of the Republic of Uzbekistan the spare parts and components for mining equipment have been manufactured and purchased in the coal industry:

Thus, if in 2007 under the contracts with 8 enterprises for 1 billion 128 million soums, in 2014 under the contracts with domestic enterprises for the amount of more than 22 billion soums, in 2015 – 27,7 billion soums, under the plan for 2016 – the conclusion of contracts for the amount of 38.3 billion soums.

The taken measures allowed to reduce the import of products for coal industry. The robust communication and long-term cooperation with the republican enterprises on cooperation have been built: PE “NMZ”, SE “NGMK”, CMRP JSC “AGMK”, “Geoburtechnika” LLC, OJSC “Andijanmash”, “Andijan machinery plant”, etc. The production and supply of spare parts have been organized as well as the development of new kinds of products:

- Mobile crusher segment –  bicuspid
- Mobile crusher segment –  tricuspid
- Belaz semiaxis
- Overside semiaxis Т-20
- Gear wheel
- Steering linkage member (Belaz)
- running rollers for bulldozers and hydraulic excavators ХЕ-250, Т-15, Т-20, Т-25, Shantuyu, ZoomLion.

1. With PE “NMZ” in Navoiy city – steel castings of alloyed steel is produced for mining excavators (bucket claws, drive wheels, racks and cremaillere pinions, track links and gears). The production of claws and segmental plates for imported mobile crushers of CFT complex, which at present have been tested and work in the conditions of “Angren” section;

2. CMRP of JSC AGMK – steel casting, bucket claws, non-ferrous casting, spare parts for mining equipment.

3. With JSC “Andijanmash” Andijan city – steel casting of carbon steels, cast iron castings for mining equipment (housings of gearboxes, sprockets, couplings, impellers and guide vanes of centrifugal pumps, etc.) are produced.

4. With “Geoburtechnika” – bevel gear conical wheels with circular tooth gear for scraper conveyors and mining excavators EKG-8I (4U) were produced; with Andijan mechanical plant spare parts for rolling stock transport were produced.

All this allowed to ensure the flow of spare parts and stable operation of equipment on coal mining, the extraction of overburden rocks and their transport loading points and heaps.

The program of repair and restoration of mining equipment is envisaged for the year 2015:

1. The increase of work scope independently at RGTO plant at the expense of production by the localization program to 3.6 billion soums per year, including that for the development of new range of products additionally by 35 items for the amount of not less than 110 thousand dollars.

2. In cooperation with other enterprises of the Republic the production and purchase of products for the repair and restoration of mining and transport equipment will increase to 7.4 billion soums (in 6 times).

In coming period (for 2016) the continuation of works on cooperation is planned with domestic manufacturers of spare parts and articles for mining and mining and transport equipment and development of new types of articles, including:

– with PE “NMZ”, SE “NGMK” and “CMRP” of JSC “AGMK” – manufacturing of crawlers to excavator EKG-15M, large diameter tooth wheels for mining and transport and mining equipment, with the enterprise “Uzbekhimmash” – on the production of spare parts for high-pressure pumps.

RGTO plant plans to develop the production of new kinds of products: gears, drill bits for drilling rig BTS-150, anchor chains of 46 mm gauge and of 53 mm for draft of walking excavators’ bucks, brass casting, etc.

10. Contact information

 JOINT-STOCK COMPANY ON COAL EXTRACTION AND SALE “Uzbekugol” “O’ZBEKKO’MIR»

1, Istiklol Str., Angren city, Tashkent area 110200

Tel: (+998 71) 150-39- 80, (+998 93) 184-55-72; (+998 71)  244-25-16,

Fax: (+99871) 150-39-89; (+998 71) 244-20-80;

E-mail: info@coal.uz, uzcoal_angren@inbox.uz,  www.uzbekcoal.uz

Address for correspondence: 27, C-14, Tashkent city, 100011