Uzbekistan cancels monopoly on scrap metal collection

In Uzbekistan, some state-owned companies will lose their privileged rights under the Presidential Decree on measures to accelerate market reforms and compliance with WTO agreements. In this regard, from 1 January 2025, the right of Uzmetkombinat JSC to purchase scrap and waste ferrous metals within the territory of Uzbekistan and the right of Uzvtortsvetmet to purchase and export scrap of non-ferrous metals in the country will be cancelled.

Uzmetkombinat commented on this decree in its press release and said that the company has long been the sole operator of the process of collection and supply of ferrous scrap in Uzbekistan. The company has 14 branches across the country, consisting of 38 facilities employing more than 1,000 people involved in the collection, processing and delivery of scrap metal. The material base of the network allows ferrous scrap of any volume to be received, laboratory checked, sorted, procured and loaded onto transport and delivered to the production facilities of Uzmetkombinat JSC in Bekabad. The annual volume of scrap supply is about 700 thousand tonnes.

However, Uzmetkombinat's monopoly on scrap collection was not implemented due to the existence of informal schemes for scrap collection and sale in the country. More than a third of the total volume of scrap collected was purchased at monopoly prices set by the state, while the remaining volume was purchased from private suppliers at market prices. According to expert estimates, the total annual volume of scrap collected in Uzbekistan is 1.2-1.4 million tonnes. The difference between these figures indicates the existence of an unofficial scrap market, which is carried out on a cash or semi-official basis.

According to the published document, from 1 January 2025, a licensing procedure will be introduced for the procurement, processing and sale of scrap and ferrous metal waste. The introduction of the licensing procedure will allow the state to increase the level of quality and control over compliance with the procedures.