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Uzbekistan to Begin Reconstruction of Shargunkumir

Saturday 17 March 2012

In the first half of 2012 Uzbekenergo, a state Joint-Stock Company, will start executing a project worth $109 million for the reconstruction and modernization of the coal mining company Shargunkumir (Sharguncoal) which is in charge of the development of coal deposits in southern Uzbekistan.

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Shargun Coal Mine
Uzbekistan has listed commercial coal reserves of ap­proximately 3,000 Mt, including 1,000 Mt of bituminous coal. The Angren field contains a proven 1,900 Mt. Uzbekistan’s current annual coal requirement is 4 Mt. At present, all of Uzbekistan’s coal is produced by JSC Ugol, with over 80% of the production coming from the Angren deposit, situated in the Tashkent oblast. JSC Ugol also has a mining operation at the Shargun mine in the Sukhardaryinskaya oblast. Ugol produced 1.91 Mt of coal, 1.85 Mt of lignite and 61,600 t of bituminous in 2003. The Angren open pit produced 1.63 Mt of coal in 2003, a 33% decrease from 2002. Approximately half of Ugol’s production is sourced from underground mines. About 70% of Uzbekistan’s coal reserves are brown coal/lignite with the remainder bituminous. Coal resources are estimated at over 5 000 Mt, of which 3 000Mt are classified as reserves. Reserves at Angren alone are estimated at over 2 000 Mt, of which most is classified as lignite. Completion of a third mining operation at Baisun could ensure that Uzbekistan has a surplus of coal for export in the future.

The Uzbek Government had approved the feasibility study of the project, envisaging increasing the capacity of the enterprise from 65,000 tons of coal in 2011 to 900,000 tons in 2016. The project will be financed by a loan from China Exim Bank worth $50 million, another loan from Uzbek Fund for Reconstruction and Development and own resources of Uzbekenergo.

It is planned to implement the first phase of modernization worth $15 million before the end of 2012, permitting the to increase the coal production by 60% – up to 160,000 tons. This first phase of modernization is funded by Uzbek Fund for Reconstruction and Development and cashes of Uzbekenergo.

Shargunkumir has the license to develop Baisun and Shargun coal deposits in the Surkhandarya region in the south of Uzbekistan which has estimated reserves of 45.8 million tons of coal. It develops these deposits by underground mining with partial processing of mined coal in the coal briquettes at Shargun briquette factory and Boysun briquette plant. Shargun coal deposit was discovered in 1941 and the Shargun mine with a capacity of 400,000 tons/year was commissioned in 1958.

In last February, Uzbekkumir, a unit of Uzbekenergo which accounts for more than 90% of the total production in the industry, bought 41.57% of Shargunkumir, shares previously owned by a consortium of British companies members of SAB Energy, Shadela Inc. and M.Metal & Co. After this acquisition, Uzbekkumir detains 67.57% of Shargunkumir’s authorized capital.

Uzbekistan has proven coal reserves amounting to 1.9 billion tons, including the brown coal of 1.853 million tons, coal – 47 million tons. Forecasted resources amount to over 5.7 billion tons of coal.

Currently, coal mining is conducted at three deposits: Angren brown coal, Shargun and Baisun deposits of coal. Uzbekkumir, Apartak, Shargunkumir and Erostigaz are all engaged in coal mining in the country.

In 2011 coal production in Uzbekistan increased by 5.9% – up to 3.551 million tons, including the share of Uzbekkumir at 3.55 million tons, Apartak 275,000 tons and Shargunkumir 18,000 tons.

According to experts, the need for solid fuel in Uzbekistan is about four million tons per year. The main consumers of coal in the country are subdivisions of Uzbekenergo itself, which consume annually about three million tons of solid fuel.

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