Home World News Economic reforms place Uzbekistan at the centre of modern-day gold rush

Economic reforms place Uzbekistan at the centre of modern-day gold rush

Economic reforms place Uzbekistan at the centre of modern-day gold rush


Treasure hunt: People sift through a mixture of sand and pebbles for gold near the village of Soykechar in Uzbekistan on March 6.
| Photo Credit: AFP

Sifting through a greyish mixture of sand and pebbles in the steppe near the southwestern village of Soykechar in Uzbekistan, Khislat Ochilov was searching for gold.

He is one of hundreds of new prospectors trying to strike it rich in a modern-day gold rush in the Central Asian country, chock-full of the precious metal.

A right once preserved for state mining firms, recent regulatory changes designed to boost the economy mean anyone can now hunt for gold.

Mr. Ochilov scanned the shiny flakes that appeared on his panning mat, submerged in a pool of water. Finally, he spotted a piece the size of a grain of rice.

Nearby, Sardor Mardiyev, 28, was hard at work digging through the earth in the vast Navoi region, a district larger than Portugal. He drives his excavator 12 hours a day, six days a week as part of a frenzy for the metal that officials hope will boost Uzbekistan’s output.

‘Global suppliers’

Last year, the country produced 110.8 tonne of gold, putting it in tenth place globally, and its central bank was the second largest net seller in the world at around 25 tonne, behind only Kazakhstan, according to the World Gold Council.

For Uzbek President Shavkat Mirziyoyev — who sees himself as a reformer opening up and liberalising his country’s economy after years of isolation and centralisation — it is not enough. He has ordered gold production to be increased by 50% by 2030.

The potential is there — only 20% of Uzbekistan’s subsoil has been explored to date.

Mr. Mirziyoyev, in power since 2016, has also called for gold bars weighing up to one kilogram to be sold in the hopes of drawing more tourists to his landlocked Central Asian nation.

Zahit Khudaberdiyev, in his 30s, is among hundreds of entrepreneurs who have decided to try their luck since the regulation change. To join the gold rush he acquired the rights to a plot of land for three years at auction.

“Before 2019, we didn’t have the right to mine gold. Some did it anyway at the risk of death — it was dangerous,” Mr. Khudaberdiyev said. His competition includes Kazakh and Chinese prospectors who secured neighbouring plots.

Behind Mr. Khudaberdiyev, trucks and diggers bustle with activity. He said they churn up tonnes of rubble and can help scourers unearth “a daily average of 12 to 15 grams.”

‘Frustrated’ farmers

In Soykechar, where farming remains a vital sector, not everyone is thrilled about the gold rush.

“Prospectors dig where we graze our cattle,” said Erkin Karshiev, a leading farmer in the region.

“Look how the last guys left everything,” the 66-year-old farmer said, motioning frustratedly to holes a dozen metres deep.

Mr. Karshiev said he was “really afraid the animals will fall in”. But his multiple calls on the authorities to resolve the issue have thus far gone ignored.

“We only want one thing: for the gold miners to level the land by filling in the holes when they leave.”

The prospecting rush is also providing an unexpected employment boon for a country where 20% of workers are forced to go abroad for work, mainly to Russia.

Mr. Khudaberdiyev gave the example of his young employees. Before he hired them, one was unemployed, the other a farm hand. “Now they earn three to four million som (240 to 360 euros) on average” each month, Mr. Khudaberdiyev said — a decent salary for the region.

The new wave of gold miners are not allowed to do as they please with the gold they dig up.

All of it must be funnelled through the Uzbek central bank, which trades it for dollars on the global market.

The country’s growing economy depends on injections of foreign currency to support the national currency. The Uzbek som has one of the lowest face values in the world, with $1 worth 12,500 som.


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