Fitch Affirms AGMK at BB on Yoshlik Project

Tashkent, Uzbekistan (UzDaily.com) — Fitch Ratings on May 15, 2026 affirmed the Long-Term Issuer Default Rating of Uzbekistan’s Almalyk Mining and Metallurgical Complex (AGMK) at “BB” with a Stable Outlook.

The decision, announced in Dubai, reflects the company’s close ties with the Uzbek state under Fitch’s methodology for government-related entities.

Fitch assessed AGMK’s standalone credit profile at “b+”, citing a range of risks associated with the implementation of the new Yoshlik mining project. Key pressure factors include negative free cash flow, rising leverage, limited liquidity, and the concentration of all operations within a single country with a relatively weak business environment.

At the same time, the agency positively assessed the company’s expanding operational scale, diversification across four metals — copper, gold, zinc, and silver — favorable cost structure, and exceptionally long reserve life.

Fitch described the Uzbek government’s willingness to support AGMK as “strong.” Uzbekistan controls 98.7% of the company’s shares, despite previously announced plans to sell a minority stake through an IPO, and continues to maintain direct influence over production, budgeting, and investment decisions.

As evidence of this support, Fitch noted that between 2020 and 2024 the government provided AGMK with US$1 billion in loans, later converted into equity, and currently guarantees around 16% of the company’s total debt.

The agency also characterized AGMK’s strategic importance to Uzbekistan as “strong.” The company produces all domestically mined copper, around 60% of which is consumed within Uzbekistan, ranks among the country’s largest taxpayers and exporters, and is one of the republic’s biggest employers.

Fitch separately warned that a potential default by the company could complicate access to international capital markets for both Uzbekistan and other state-related entities.

A central focus of the agency’s assessment was the Yoshlik project, which Fitch described as transformational for AGMK’s business.

The total capital investment required for the project is estimated at US$12.6 billion and will be implemented in two phases.

The first phase, valued at US$7.3 billion, aims to increase copper production capacity to 300,000 tonnes per year by 2029 from the current 148,000 tonnes, while gold production is expected to rise from approximately 630,000 ounces to 900,000 ounces by 2030.

Of the planned financing for the first phase, around US$4.3 billion has already been utilized for mine development, construction of a third copper concentrator, and the initial stages of a smelter project.

The second phase, estimated at US$5.3 billion, includes expansion of the mine and construction of a new processing plant. A final investment decision is expected before the end of 2026.

However, Fitch noted a significant delay compared with the original timeline. The launch of the Yoshlik mine and the new processing plant has been delayed by around two years due to technical, logistical, and geopolitical factors.

Fitch linked these delays to a projected increase in the company’s gross debt-to-EBITDA ratio from 1.8x in 2025 to above 3.0x by 2029, exceeding the agency’s negative rating sensitivity threshold of 2.5x.

Dividend policy also remains a source of uncertainty. Historically, AGMK distributed more than 100% of net profit as dividends. The company is currently developing a new policy linking dividend payments to leverage levels, although the government has not yet approved it.

Regarding competitive advantages, Fitch forecasts that AGMK’s flagship Kalmakyr mine will remain in the lower half of the global copper cost curve due to low operating costs, by-product revenues, and the fact that around 70% of expenses are denominated in the national currency.

The combined proven and probable reserve life of the Kalmakyr and Yoshlik deposits is estimated at around 80 years at an annual production level of 300,000 tonnes of copper — a figure Fitch said is unmatched among comparable companies.

The agency identified comparable peers as Hudbay Minerals, First Quantum Minerals, Ero Copper, and Ivanhoe Mines. AGMK’s production volumes exceed those of Hudbay but remain below First Quantum, while maintaining one of the industry’s highest profitability levels, with EBITDA margins projected at 45–55% throughout the commodity cycle.