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Gold

Production of Granulated Gold and Silver Launched in Uzbekistan

On July 16, Uzbekistan’s Almalyk Mining and Metallurgical Complex announced it would start producing gold and silver granules. The Almalyk plant will also begin production of granulated copper and plans to produce granules from other non-ferrous metals. The equipment for producing granulated gold, silver, and copper was purchased in Italy. According to the Almalyk Complex’s press service, the new products will prove convenient for jewelers. In jewelry production, losses occur during the re-melting of ingots and other means of mechanically processing metals. Gold and silver granules will reduce the cost of jewelry products and improve their quality. At a government meeting about Uzbekistan’s jewelry industry last month, President Shavkat Mirziyoyev said that just 6% of the gold mined in Uzbekistan is processed within the country, and exports of finished products from gold amount to only $78 million. The president emphasized the importance of creating jewelry zones equipped to attract entrepreneurs and reviewing raw materials that are supplied to the industry. In January-March 2024, Uzbekistan exported gold worth $2.6 billion, with revenue from gold exports comprising 41.7% of the country’s total export revenue.

Finance Investments Banking Export/import Economy Gold

Drop in Uzbekistan’s Gold Sales

In April, Uzbekistan's sales of gold dropped significantly, according to data published by the World Gold Council (WGC). In the same month, the total gold reserves held by the world’s central banks increased by 33 tons and volumes of purchases and sales amounted 36 tons and 3 tons respectively. The most active buyers of precious metals during the reporting period were the Central Banks of Turkey (8 tons), Kazakhstan (6 tons), and India (6 tons). Meanwhile, the Central Bank of China greatly reduced its gold purchases , while increasing its reserves by 2 tons to 2,264 tons; the lowest figure since November 2022. A significant decrease in precious metal sales occurred at the expense of Uzbekistan and Jordan, whose reserves decreased by only 1 ton. In May, the world central banks' reserves increased by 10 tons, the volume of purchases was 23 tons, and that of sales, totalled 12 tons. During that month, Kazakhstan took the lead in sales of 10 tons of gold. A previous report, posted by the TCA, provided data for Uzbekistan’s gold exports in February and March.

Foreign Trade Gold Economy

U.S. Ranks Among Top Ten in Uzbekistan’s Foreign Trade Turnover

The Statistics Agency of Uzbekistan has presented information on the country’s foreign trade turnover for January - May 2024. The republic’s foreign trade turnover (FTT) reached $26.7 billion during the reporting period. The volume of exports was $10.8 billion, and the volume of imports was $15.8 billion. Compared to the same period last year, the volume of exports increased by 1.9%, and the volume of imports increased by 3.7%. Uzbekistan's negative foreign trade balance has reached $5 billion. China has retained its position as Uzbekistan's largest trading partner. During the reporting period, the volume of mutual trade reached $5 billion, which is 18.9 % of the republic's total foreign trade turnover. A significant segment of foreign trade turnover was also registered with Russia (17.9%), Kazakhstan (5.9%), Turkey (4.5%), and South Korea (3.4%). Top 10 countries with the highest share in foreign trade turnover of Uzbekistan in January-May 2024 were: China – $5.05 billion; Russia – $4.78 billion; Kazakhstan – $1.58 billion; Turkey – $1.19 billion; Korea – $920 million; France – $471 million; Turkmenistan – $455 million; Germany – $426 million; the USA – $386 million; and Afghanistan – $382 million. For the five months in question, exports without gold increased by 5.9%, almost $6.58 billion. During this period, the share of gold exports decreased from 40.3% to 38.6 %, or $4.2 billion. Furthermore, the share of industrial products in total exports rose from 15.8% to 15.9%, chemicals from 4.3% to 5.6%, mineral fuels from 3% to 3.2%, and machinery and transport equipment from 4.5% to 4.6%, whilst the share of food products and live animals decreased from 6.3% to 5.8%. Machinery and transport equipment (37.3 %), industrial goods (15.2 %), and chemicals and similar products (12.3 %) accounted for the largest share of imports.

Jewellery business and economy Export Gold Industry

Uzbekistan Seeks to Boost its Jewellery Industry

At a government meeting on June 19, plans to further develop Uzbekistan’s jewellery industry, support production and increase exports were presented to President Shavkat Mirziyoyev. Noting the country’s huge potential for increasing the production and export of jewellery, the president said that just 6 percent of the gold mined in Uzbekistan is processed, and exports of finished products from gold amount to only $78 million. He thus emphasized the importance of creating jewellery zones equipped to attract entrepreneurs, a review of supplies of raw materials to the industry, and training specialists in the field. With reference to the above, the head of state issued instructions for a program to be developed to enhance the domestic jewellery industry until 2027. The meeting also discussed piloting special jewellery centres with production, exhibition and trading areas in Tashkent and the Namangan region. The government is considering establishing, until October 1, 2026, a zero rate of customs duty and value added tax on equipment, packaging and labelling materials used, but not produced, in Uzbekistan in the jewellery industry. An additional proposal was mooted to establish a zero-customs duty rate for the export of Uzbek jewellery to the USA. In January-March 2024, Uzbekistan exported gold worth $2.66 billion. In the first quarter of the year, revenues from gold exports comprised 41.7% of the country’s total exports. In 2023, gold exports accounted for 33.4%, or $8.1 billion, of Uzbekistan’s total export volume.

Banking Export/import Economy Gold

Uzbekistan’s Reserves Reached $36.6 Billion in May.

The Central Bank of Uzbekistan has stated that its gold and hard currency reserves reached in excess of $36 billion in May, an increase of over $1.5 billion compared to the previous month. However, the physical volume of gold in reserves decreased by 11.4 million troy ounces. Furthermore, the volume of the regulator’s deposits with the central banks of other countries and the International Monetary Fund increased significantly and amounted to $422.7 million. The amount of funds in the accounts of other foreign financial institutions also increased by $1.2 billion. The Times of Central Asia previously reported that as of March 1st, 2024, Uzbekistan’s official reserves amounted to $32.19 billion, having decreased by $2.37 billion in January and February.

GDP Gold Economy Export/import Investments

High Gold Prices Keep the Uzbek Economy Afloat

In March this year, Uzbekistan became the largest seller of gold in the world: eleven tons of the strategic asset were sold. This strategy has allowed it to maintain reserves at a time of increasing government debt and state budget deficit. "We have a trade deficit, a budget deficit. Perhaps other exports are not as good as we would like them to be. With high gold prices amid geopolitical instability, there are worse times to sell gold," Yuli Yusupov, an independent Tashkent-based economist, told Radio Ozodlik. As of May 1, Uzbekistan's foreign exchange reserves totaled $34.2 billion, of which about $26.5 billion was gold, according to the country's Central Bank. By the end of 2023, the country's "financial safety cushion" has decreased by $1.2 billion - from $35.77 billion to $34.56 billion. Gold helps Uzbekistan "stay afloat" in difficult economic conditions. Between 2010 and 2014 the country exported 207 tons; between 2015 and 2020 it exported 480 tons. Now, Uzbekistan produces an average of 100 tons of gold per year, with plans to produce 150 tons. At this rate, gold reserves should last 20-30 years, but the republic is developing new quarries, the reserves of which could be quite impressive. For example, reserves in the Yoshlik mine may be up to 5,000 tons. Nevertheless, according to analysts, the constant sale of gold is not a long-term solution, and it will be necessary to develop industrial production and services, and export goods with high added value. Uzbekistan's growing dependence on gold is evidence of obvious problems in the economy, which, despite visible positive changes, remains in a deadlock. By the end of 2023, when Uzbekistan's trade deficit amounted to a record $13.7 billion, the share of gold exports in the total volume rose to a third. President Mirziyoyev's rise to power marked sweeping economic reforms that have attracted foreign investors, but at the same time increased external debt, which by the end of 2023, according to the International Monetary Fund, amounted to $31.7 billion, or 35.1% of the country's GDP, roughly doubling in the past five years. Under Islam Karimov (Uzbekistan's first president) this varied between 10-15%.