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State Enterprise “Navoiyuran” Enters the International Arena

Modern management and global projects, the transformation of leading enterprises in step with the times play an important role in increasing the stability and efficiency of the country’s economy. The Presidential Decree “On measures to increase the volume of uranium mining, processing and transformation of the state enterprise Navoiyuran in 2022-2030” dated July 14, 2022 defines the stages for the transformation of the Navoiyuran State Enterprise and specific tasks.

Transformation based on strategic priorities helps in the implementation of global projects and programs that will improve the operation of the enterprise, ensure the active work of all structural divisions and create a modern corporate governance system.

The key task of transformation is to turn the enterprise into a competitive company through the systematic implementation of digital technologies and platform solutions in order to reduce the cost of products, increase operational efficiency and ensure reliable operation.

State Enterprise “Navoiyuran” is also working to create a modern corporate governance system, attract advanced global technologies and provide competitive personnel. In this regard, the above Presidential Decree is a policy document for specialists and partners of the enterprise.

Development strategy is a step towards the long-term future of the enterprise

Correct and targeted development of transformation processes depends primarily on the enterprise development strategy. This is of great importance in achieving your goals and objectives. The correct formulation of an enterprise development strategy becomes a powerful promotion tool and accelerates the process of achieving production goals. Every enterprise feels the need for such planning in order to monitor changes in market conditions, timely update technologies and intellectual developments, and constantly improve their level.

Thus, one of the goals of developing a strategy is to adapt the enterprise to the constantly changing conditions of the external market.

The program for the development strategy and increasing the operational efficiency of the Navoiyuran State Enterprise until 2030 was implemented by the international consulting company McKinsey & Company.

As part of this strategy, 36 initiatives have been developed to improve operational efficiency. Currently, the enterprise is implementing nine of them, aimed at the operational efficiency of digital transformation. Roadmaps have also been developed for the implementation of three priority areas from the “quick wins” category, directly related to production.

State Enterprise “Navoiyuran” is introducing International Financial Reporting Standards (IFRS) for the first time from January 1, 2022. The first financial statements in accordance with IFRS cover the period until the end of 2023. The company plans to release its first audited financial statements under IFRS in September 2024. An auditing company from the Big Four was chosen as the external auditor: 15 Deloitte experts conduct an international audit of financial statements.

State Enterprise “Navoiyuran” intends to receive an international credit rating from one of the international credit agencies Fitch Ratings, S&P and Moody’s by the end of 2024.

At the same time, in accordance with the requirements of the Fair Value Valuation standard (IFRS 13), to determine the fair value of fixed assets on the enterprise’s balance sheet, joint work was carried out with the international valuation company Grant Thornton Valuation and the formation of the market value of fixed assets was achieved.

For any company, a credit rating is of great importance in attracting foreign investment and increasing the confidence of international partners. This rating is an indicator that helps to understand how reliable an enterprise is. When determining it, not only the current financial position of the organization, the amount of capital and debt, but also the entire previous history are taken into account. The main task is to provide potential investors with objective information. In other words, a credit rating is a kind of reputation of a company. That is why it is so important that SE “Navoiyuran” receives an international credit rating.

To obtain international credit ratings, a list of 17 important sites for maintaining records of current reserves in accordance with international standards (JORC Code) has been defined. In this regard, about 20 specialists from the consulting company SRK Consulting Group, by the end of last year, completed a reassessment of the enterprise’s resources at the seven sites mentioned above.

ESG principles – a guarantee of financial and environmental sustainability

The company is working on financial recovery and implementation of environmental, social and corporate governance (ESG) criteria. To obtain this rating, the implementation of standards for writing a sustainable development report (GRI – Global Reporting Initiative) has begun, as well as the collection of information for the publication of a report prepared by external consultants, and preparations are underway for the official publication of the report. For this purpose, together with the company Janser Consult GmbH, training courses were organized (in Germany) in the areas of ESG and GRI, which were completed by 12 employees of the company.

Digital transformation is the basis of digital technologies

Today, in the international business arena of rapidly changing technologies and increasing competition in the global market, for enterprises wishing to become as flexible as possible and diversify their sources of income, the implementation of the most effective approaches and solutions in the field of digital transformation becomes a good incentive.

In order to fully digitalize production and management processes at the Navoiyuran State Enterprise, work is underway to create an enterprise resource planning (ERP) information system and introduce a digital management system for the production of uranium raw materials, preliminary and final stages of processing (SCADA – supervisory control and data acquisition system).

In particular, Venkon group LLC is developing an ERP system covering production and management processes. The company’s specialists are trained to work with the program, and today they are entering data with parallel use of it in test mode.

The company is at the final stage of developing the software modules “International Financial Reporting Standards”, “Personnel and Payroll Management”, “Financial Reporting” and “Commercial”.

Specialists in the development of the “Planning”, “Budgeting”, “Treasury” and “Purchasing” modules have prepared a preliminary technical specification, and work has begun on introducing these modules into the current program.

Work is also underway to develop an electronic document management system, implement the “Information and Analytical Management of Uranium Mining” system, digitalize the activities of the geological laboratory of the Research and Production Center “Geology of Uranium and Rare Metals”, and create the “Automated Laboratory Data Management” system.

The final testing of the e-Protokol web system, which automates meetings of the Supervisory Board and voting processes, and is transferred to the enterprise’s server devices, was carried out. The IT Works company has digitized information on geological data from the materials of the enterprise fund, the electronic program has been fully put into operation.

Foreign specialists – a guarantee of international experience

Today, work to improve the corporate enterprise management system is yielding results. The main and integral part of the transformation processes, of course, is the improvement of the corporate system. In this regard, the image of the enterprise at the level of international standards is largely formed by qualified and experienced management personnel who have knowledge in their field. To speed up work in this direction, based on the relevant decision of the Agency for Management of State Assets of the Republic of Uzbekistan, the organizational structure of the enterprise was approved.

It is important to note that foreign specialists have been involved in the Supervisory Board of the enterprise: US citizen Kevin G. Kim and French citizen Gerard Fries, as well as German citizen Andreas Mittler. Andrey Tsai (Russia) began work as head of the internal audit service of the enterprise. When recruiting these specialists, special attention was paid to their experience, achievements and success profiles in the leading countries of the global uranium industry.

Another noteworthy point: in the organizational structure of the State Enterprise “Navoiyuran”, the internal audit and compliance services are removed from the subordination of the general director of the state enterprise.

In addition, the project “Management Policy of the State Enterprise “Navoiyuran” is being developed.

A positive image of the enterprise is created by qualified personnel

The main value of an enterprise is its employees. One of the priority tasks of the enterprise is the training of highly professional and qualified engineering and technical personnel, including promising youth. The transformation of the enterprise’s HR (human resources) system adapts work in this direction to modern and international standards. HR transformation is the introduction of digital technologies to improve the activities of an enterprise’s HR department.

Initially, work was carried out to assess the positions of the enterprise. The international consulting company Korn Ferry (USA) was involved in the process. The positions of the enterprise and the activities of the HR department were assessed. In particular, the assessment of 52 positions was carried out using the Hay Group methodology. In addition, a strategy for transforming the system for managing human resource functions, a program for “Developing the capabilities of management personnel,” as well as managerial positions and employee success profiles have been developed.

The training center prepares reserve personnel

Today, the company employs about nine thousand engineers and technical workers. Of these, 1803 have higher education, 815 are managers (leadership personnel).

In 2023, 1,297 workers were trained at the Navoiyuran State Enterprise, and 411 workers completed retraining courses.

In order to bring work in this direction to the international level, time itself requires the development of the activities of the enterprise’s training center and the improvement of the personnel training system.

In order to improve the level of knowledge and skills of specialists working in the field of uranium geology, a memorandum of cooperation was signed with the Eurasian Institute of Competitiveness (Belgium) and GBS Group Ltd (UK). Based on an agreement concluded with the international consulting company Korn Ferry, special training courses have been organized for management employees. It was decided to conduct systematic advanced training training in international educational institutions.

At the same time, on the basis of a memorandum of cooperation concluded with the Association for the Development and Popularization of Working Professions Worldskills Uzbekistan, an agreement was reached on the development of educational programs for the enterprise’s training center based on international standards.

In 2023, five employees of the company took part in a training and practical seminar on Worldskills standards in Incheon (South Korea), four took part in training courses “Information security, cybersecurity and privacy protection, information security management systems”, organized by the international company Universal Certification (Turkey ).

Cooperation has been established with IOSH (Great Britain), which specializes in organizing training courses based on international standards in the field of occupational health and safety in the world, the Korean International Cooperation Agency (KOICA), Deloitte and Vencon, and the qualifications of employees have been improved. At the training center under the Ministry of Economy and Finance of the Republic of Uzbekistan, 32 employees of the enterprise were awarded certificates in the field of public procurement.

Ensures openness and transparency of the procurement system

The company is also adapting its procurement and management audit system to international standards, as well as the formation of compliance and anti-corruption services. What does this give? Sustainable production, continuous supply of raw materials and materials in accordance with procurement requirements, compliance with technical requirements for the quality of raw materials and materials, minimal procurement costs, regular quality control of purchased categories, effective management of raw materials and materials, absence of illiquid reserves and excess inventory, effective use of working capital funds, transparency of procurement processes, consistency in procurement management, creation of key indicators for evaluating suppliers and employees.

Based on the recommendations of the international company Deloitte, the company is working on the tasks specified in the “road map” developed to increase the openness and transparency of public procurement processes, reorganize the procurement system, and increase the effectiveness of anti-corruption.

In order to have an open and transparent procurement policy and improve the efficiency of using financial resources, the company continues to introduce KPI (key performance indicators) criteria into procurement processes.

French experience

As part of specific tasks in cooperation between the state-owned enterprise Navoiyuran and the French company Orano Mining, the Nurlikum Mining joint venture was created in the Tamdy district of the Navoi region, which has carried out more than 119 thousand meters of geological exploration work over the past three years.

A tripartite strategic partnership agreement was concluded to expand cooperation in the field of uranium mining and processing. As part of this interaction, experience is exchanged in the application of new methods of uranium mining and modern technologies in production.

To intensify and optimize project work, a working group has been created from specialists from Orano Mining, SE Navoiyuran and JV Nurlikum Mining, which at its meetings discusses a number of technical and administrative issues encountered within the projects, hears the opinions of the parties on the processes that require implementation to achieve production of the first products in 2025.

As a result of the visit of the management of the Orano Mining company at the end of last fall to Uzbekistan, a “road map” was approved for uranium mining in 2025 at the Zhanubiy Zhingeldi site, for geological exploration work at promising uranium deposits in the territory of Bukhara – Khiva and Ustyurt, for the joint modernization of the Scientific Laboratory -production center “Geology of Uranium and Rare Metals”, taking into account the acceleration of geological exploration work and an increase in the volume of samples. In order to expand cooperation in off-balance sheet, hydrothermal and black shale deposits, it is planned to create a branch of CIME (Innovation Center for Extractive Metallurgy), owned by Orano Mining, in Uzbekistan. In addition, prospects for cooperation in joint uranium mining at uranium deposits in Mongolia are being considered.

Correctly and purposefully implemented transformation processes take the growth of an enterprise in the international business environment to a new level. Transformation is not only a requirement of the time, but also one of the important stages ensuring competitiveness and meeting consumer demand.

It is important that in the future at the state-owned enterprise “Navoiyuran” the quality of products will improve, the ability to analyze data will increase, advanced technologies will be introduced and innovative proposals will be developed, a comfortable flexible working environment and new opportunities for engineering and technical workers will appear. The main goal is to create a modern corporate management system at the enterprise and further expand the geography of exports.