Priority Tasks for the Development of the Ferrous Metallurgy Industry

Bugun, 16:21
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A new phase is beginning in the development of Uzbekistan's ferrous metallurgy industry, focused on expanding the domestic raw material base, reducing import dependence, and localizing the production of new steel products.

At the same time, the sector is set to improve production efficiency through the adoption of artificial intelligence and digital technologies, while implementing a series of major investment projects.

Current State of the Industry, Achievements and Challenges

President Shavkat Mirziyoyev chaired a meeting dedicated to advancing Uzbekistan's ferrous metallurgy industry to a new stage of development. It was noted that the sector serves as a fundamental supplier of raw materials to industries with a combined annual output of approximately US$50 billion, including construction, building materials production, automotive manufacturing, machinery engineering, energy, and the electrical engineering industry.

It was emphasized that Uzbekistan's transition toward a technology- and innovation-driven economic model requires maintaining sustainable annual economic growth of no less than 8–9%, which is necessary to achieve a GDP of US$240 billion by 2030.

At the same time, the President highlighted the industry's persistent structural constraints. These include a high dependence on imported raw materials, elevated production costs, substantial energy consumption, and insufficient progress in digitalization and the adoption of artificial intelligence technologies. Against the backdrop of increasing geopolitical tensions and ongoing disruptions in international logistics, strengthening the domestic raw material base, expanding the range of metallurgical products, and improving their quality have become strategic priorities.

Over the past decade, domestic demand for steel sheet, rolled steel products, pipes, and steel structures has tripled, reaching 5.5 million tonnes.

Demand is expected to increase further as major investment projects are implemented. Construction of the country's nuclear power plant, the fourth copper concentrator, and a new copper smelter alone will require approximately 2.5 million tonnes of steel sheet and reinforcing steel.

Over the next five years, Uzbekistan plans to commission new production facilities valued at US$180 billion, implement US$27 billion worth of infrastructure projects, and construct apartment buildings with a total capacity of 800,000 housing units.

As a result, annual demand for steel products is projected to increase by 1.5 times, exceeding 8 million tonnes by 2030. In this regard, the President stressed the need for detailed assessments identifying the production capacities that will be required to meet the projected demand.

Currently, the Bekabad Metallurgical Plant produces 40% of its rolled steel output from recycled scrap metal, while the remaining 60% depends on imported raw materials.

Each year, around 700,000 tonnes of ferrous scrap are officially collected and processed across the country. At the same time, an additional 500,000 tonnes remain outside the formal recycling system.

Uzbekistan also possesses considerable domestic resource potential. Proven iron ore reserves are estimated at 1.5 billion tonnes, while additional deposits are expected to be identified in the Tashkent, Samarkand, and Surkhandarya regions.

Particular attention was given to the expansion of advanced technologies within the industry. It was noted that the Almalyk Mining and Metallurgical Complex has already achieved practical results through the application of artificial intelligence.

For example, an AI-enabled online monitoring system for mining haul trucks, designed to optimize transportation routes, has reduced annual diesel fuel consumption by 1,500 tonnes, generating savings equivalent to UZS 22 billion. In addition, AI-based forecasting of excavator tooth wear has reduced technological losses by a further UZS 4 billion annually.

These results demonstrate the practical potential of digital technologies to improve the efficiency of metallurgical production while reducing operating costs.

New Initiatives and Priority Measures for the Development of the Ferrous Metallurgy Industry

To meet the growing demand of the economy, the President outlined a comprehensive set of measures aimed at expanding the domestic raw material base, increasing production capacity, localizing new product lines, accelerating digital transformation, and strengthening industry-focused research and innovation.

One of the first priorities will be to establish a more transparent and efficient system for the circulation of ferrous metals. All processes related to the collection, transportation, and processing of scrap metal will be transferred to a real-time electronic monitoring system. To promote fair competition, price stability, and effective market oversight, a dedicated project office will be established under the Government.

The new office will conduct daily monitoring of the steel products market, assess supply and demand for raw materials and finished products, and maintain digital product passports containing information on quality, origin, and physical and chemical characteristics. The project office is to become operational within one month. Beginning on 1 August, the "E-lom" electronic platform will be launched to digitally monitor the circulation of ferrous scrap metal.

A separate package of measures is aimed at expanding the country's domestic raw material base. An agreement has been reached with Chinese partners to develop the Surun-Ota deposit and produce 650,000 tonnes of iron ore annually. Beginning in 2027, iron ore concentrate from this deposit will be supplied to the Bekabad Metallurgical Plant.

Development of the Tebinbulak iron ore deposit over the next three to four years is expected to create production capacity for 1 million tonnes of steel annually. In parallel, Uzbekistan and Tajikistan have signed a memorandum on the annual supply of 700,000 tonnes of iron ore. The President instructed responsible agencies to finalize the contract promptly and begin deliveries as early as next year.

Large private companies will also play a greater role in developing the country's mineral resource base. The objective is to establish fully integrated production chains covering geological exploration, mining, and downstream steel production. One enterprise in the Samarkand region has expressed its readiness to invest up to US$500 million in iron ore extraction, subject to access to an iron ore deposit. At the same time, the Bekabad Metallurgical Plant proposed developing the Temirkon deposit in the Farish district, with estimated resources of 32 million tonnes. The President instructed the relevant authorities to create the necessary conditions for implementing these initiatives.

Additional opportunities are associated with geological exploration in the Tashkent, Samarkand, and Surkhandarya regions, where further iron ore deposits are expected. At the same time, implementation of large-scale metallurgical projects will increase demand for manganese and ferrosilicon, both essential for improving steel quality.

Prospective mineral deposits will be analyzed using artificial intelligence technologies. Within one month, a geological development program aimed at expanding reserves of iron ore and associated beneficiation minerals is to be prepared. Regional authorities have also been instructed to involve major private investors in this work.

At present, approximately 150 small and medium-sized private enterprises operate in Uzbekistan's metallurgy sector. To ensure a stable supply of raw materials, a specialized company will be established to organize centralized imports of metallurgical inputs. A total of US$200 million will be allocated for this purpose. All imported raw materials will be sold exclusively through the commodity exchange.

Another strategic priority is expanding the range of domestically manufactured steel products and localizing new production facilities. The President emphasized the need for closer industrial cooperation between major metallurgical enterprises and private manufacturers.

Domestic demand for seamless steel pipes alone is estimated at US$280 million, while Uzbekistan's principal trading partners collectively import approximately US$1.5 billion worth of such products each year. Localizing seamless pipe production will require US$275 million in investment. Once implemented, the project is expected to generate annual output valued at US$450 million, including US$170 million in exports.

Additional production opportunities have emerged following the commissioning of a new casting and rolling complex. Its capacity will make it possible to localize the production of steel products worth approximately US$1.5 billion for the automotive industry, specialized vehicles, industrial equipment, household and agricultural machinery, and construction materials.

Within the next three months, a package of investment projects is to be prepared to launch production of seamless pipes, cold-rolled steel, metal additive manufacturing (3D metal printing), and high-precision metal processing.

The city of Bekabad will become a major center for new industrial development. A 90-hectare Eco-Industrial Technologies Park with fully developed infrastructure will be established adjacent to the Bekabad Metallurgical Plant.

The industrial park will host a Research Center for Ferrous Metallurgy, responsible for developing new steel products and introducing them into industrial production. It will also include a modern laboratory authorized to issue internationally recognized certification.

Already this year, joint projects with private investors are expected to begin for the production of large-diameter pipes, lifting cranes, filtration equipment, and other advanced steel products.

At the same time, regional industrial cooperation will be strengthened. Around major metallurgical enterprises in the Samarkand, Jizzakh, Namangan, and Syrdarya regions, a portfolio of cooperative projects totaling US$100 million will be developed. These projects are expected to expand regional value chains, increase private sector participation, and accelerate the localization of new steel products.

Particular emphasis was placed on digital transformation and the adoption of artificial intelligence. A dedicated modernization program will be introduced for metallurgical enterprises, targeting a 20% increase in equipment utilization, a 10% reduction in production costs, a 15% decrease in energy consumption, and a 20% reduction in maintenance costs and production downtime.

At the Bekabad Metallurgical Plant, AI-based identification of non-metallic inclusions in scrap metal is expected to generate annual savings of UZS 25 billion, while the installation of intelligent sensors on melting furnaces could reduce electricity costs by US$3 million per year.

The Center for Economic Research and Reforms (CERR) has been designated as the intellectual and analytical hub of Uzbekistan's metallurgical industry and will coordinate the sector's scientific and analytical development.

The initiative will also involve the Central Research Laboratory of the Navoi Mining and Metallurgical Company, the Scientific and Technological Center of the Almalyk Mining and Metallurgical Complex, the Uzbek–Korean Scientific and Technological Center of the Technological Metals Plant, Tashkent State Technical University, Navoi State University of Mining and Technologies, the Almalyk State Technical Institute, and the Almalyk Branch of the National University of Science and Technology MISIS.

Research institutions and universities have been instructed to assess demand for new materials, identify priority investment projects for each region, determine the technologies required, and develop workforce training programs. Regional metallurgy development strategies covering one-, three-, and five-year planning horizons will be prepared and submitted to regional administrations.

Beginning with the new academic year, the Department of Ferrous Metallurgy will be established at the Bekabad Metallurgical Plant. Specialist training will be organized under a dual education system, combining classroom instruction with practical industrial training.

The Center for Economic Research and Reforms will also launch a digital platform to analyze structural challenges in the metallurgical sector, identify existing constraints, and determine priority areas for future development.

Research conducted by universities and specialized institutions will be focused on solving practical industrial challenges, supporting technological modernization, and accelerating industrial development. A venture fund will be established to finance and commercialize scientific innovations.

Implementation of these measures is expected to expand Uzbekistan's domestic raw material base, reduce dependence on imported inputs, increase production of new steel products, and localize high-value-added manufacturing. At the same time, the program aims to strengthen private sector participation, deepen regional industrial cooperation, reduce production and energy costs, accelerate the adoption of artificial intelligence, and reinforce the integration of science, education, and industry.

Concluding the meeting, the President stressed that Uzbekistan's metallurgical industry must achieve a technological leap forward. Heads of sectoral ministries, regional administrations, metallurgical enterprises, research centers, scientific institutions, and higher education establishments were instructed to ensure the full implementation of every assigned task. At the end of the year, the performance and personal accountability of each responsible official will be subject to a comprehensive evaluation.

CERR Public Relations Sector