Fitch does not expect Uzbekistan and NMMC and AMMC ratings review due to gold price decline

A decline in global gold prices in itself should not lead to a deterioration in credit ratings of Uzbekistan's mining companies and the country's sovereign rating. This assessment was provided by Fitch Ratings on October 27 at the Fitch on Uzbekistan conference in Tashkent. For investors in Uzbek securities, this means the agency does not link rating decisions to short-term price fluctuations in metals.

What prices the agency uses

According to Fitch's presentation, calculations use a gold price of $4500 per troy ounce in 2026, $3800 in 2027, $3300 in 2028, and $2700 in 2029. By 2029, the calculated price is 40% lower than the 2026 level. The long-term assumption for evaluating companies throughout the market cycle (mid-cycle) is $2300 per ounce.

Fitch's Senior Director for Natural Resources in the EMEA region, Yulia Buchneva, emphasized that this is not an exact forecast of quotes. According to her, the agency does not attempt to predict the price, for example, in 2029, but applies a mid-cycle view, which is always sufficiently conservative. This approach helps avoid rating volatility: they are not reviewed up or down due to price declines or sharp increases over a year.

Companies: NMMC and AMMC

Fitch expects that cash flows from the country's largest mining enterprises will grow. The assessment considers not only metal prices but also flexibility in financial and dividend policies, as well as the ability to adjust investment programs. The Navoi and Almalyk Mining and Metallurgical Combines (NMMC and AMMC) have formed a significant portfolio of investment projects.

By 2029–2030, considering production growth, diversification and launch of new deposits, cash flows will increase, so a price decline will not change the rating, Buchneva said.

Budget and sovereign rating

Gold remains an important export commodity and source of foreign currency inflows for Uzbekistan. All else being equal, a decline in metal prices could reduce export revenues from gold miners and related budget receipts; however, the outcome also depends on production volumes, expenses and financial results of companies.

Buchneva did not provide a quantitative estimate of possible budget losses. She noted that Uzbekistan's economy is sufficiently diversified, diversification is expected to strengthen, and this will help when gold prices change.

Earlier, Fitch improved its outlook on Uzbekistan's sovereign rating from stable to positive, maintaining the rating itself at BB.