Navoi Mining gets $150 million loan from Japan’s largest bank

Navoi Mining and Metallurgical Company (NMMC) has entered into a bilateral loan agreement with Japan’s Mitsubishi UFJ Financial Group (MUFG) worth $150 million, the proceeds of which will be directed towards NMMC’s ongoing investments.

NMMC, as the largest industrial enterprise in Uzbekistan, currently operates two major mining sites, seven hydrometallurgical plants and two heap leaching facilities, making it the largest gold producer in Central Asia.

Its main asset is Muruntau-Myutenbai, hailed by the company as the largest open-pit mine in the world with a 101-million-oz. resource base. Combined with its other deposits, NMMC’s total mineral resources are estimated at 148 million oz. of gold.

The loan deal with MUFG follows NMMC’s receipt of long-term credit ratings of “BB-” with stable outlook from both Fitch and S&P. It also received higher standalone ratings from the firms, reflecting its scale as a top-four gold producer globally with expected production of over 3 million ounces in 2024.

Jakhongir Khasanov, CFO of NMMC, said the loan further demonstrates NMMC’s financial health and creditworthiness. “Funds from the transaction will support our ongoing efforts to invest in improving and expanding our operations and to cement our place among the world’s leading gold producers.”

In its press release dated Aug. 30, NMMC said its investment program is being implemented in stages and includes projects aimed at increasing processing capacity and production volumes, creating new jobs through mine development, launching new production facilities, and modernizing existing ones.

In an earlier release, Fitch said NMMC benefits from a low-cost base compared to its peers, a long mine life of its largest mine, Muruntau, high profit margins and low leverage. It also noted that NMMC is two years ahead of schedule in completing its investment program, which could increase the company’s production capacity by 30% by year-end compared to 2017.

Consistent implementation of structural reforms in Uzbekistan, which contribute to macroeconomic stability, maintain high GDP growth rates and improve fiscal outturns, is also one of the factors that contributed to the company’s assessment, Fitch added.

The main shareholder of NMMC is Uzbekistan’s Ministry of Economy and Finance, holding 98% of the charter capital.

Headquartered in Tokyo, MUFG is Japan’s largest financial group with over 360 years of history. The bank has a global network with approximately 2,000 locations in more than 40 countries, making it one of the largest in the world.