THE ROLE OF THE PRIVATE SECTOR IN THE MINING AND GEOLOGY INDUSTRY

SCIENCE AND INNOVATION INTERNATIONAL SCIENTIFIC JOURNAL VOLUME 4 ISSUE 12 DECEMBER 2025 ISSN: 2181-3337 | SCIENTISTS.UZ 14 THE ROLE OF THE PRIVATE SECTOR IN THE MINING AND GEOLOGY INDUSTRY Kh.A. Abdujalilov1, M.A. Abdurakhmonova2 4th-year student, Faculty of Economics (by sectors and industries), University of Geological Sciences1 Scientific Supervisor, Doctor of Economics, Professor, Head of the Department of “Economics and Management, University of Geological Sciences2 https://doi.org/10.5281/zenodo.18050745 Abstract. This article provides a comparative analysis of the specific characteristics of the mining industry and the participation of the private sector in this field based on two methodological approaches. The role of the private sector is mainly revealed through the liberalization of the investment climate, institutional-economic analysis, and the economic assessment of development factors. The mining and geology sector is one of the key industries for Uzbekistan; at the same time, its function as a major macroeconomic indicator of the country and its role in production are highlighted. The legal and institutional foundations of private sector activities in this field are also analyzed. Keywords: mining industry, institutional-economic analysis, methodology, tax and political incentives, investment climate, private sector. Introduction. Uzbekistan is considered a country extremely rich in mineral resources. The country possesses large reserves of various minerals, oil and natural gas and is recognized as one of the leading resource-producing states in the region. For example, in terms of gold reserves— which have significant macroeconomic importance in the global financial system—Uzbekistan ranks fourth in the world, while in terms of production volume it ranks seventh. In addition, Uzbekistan is also among the world’s largest countries in terms of uranium reserves. Furthermore, the country has large deposits of strategically important metals such as copper, zinc, lead, tungsten, and molybdenum [1]. Methodology. An analysis of the existing scientific literature on private sector participation in the mining and geology sector shows that it is mainly based on two methodological approaches: institutional-economic analysis and the economic assessment of development factors. In the scientific-popular article by U. Yusupov entitled “The Mining and Geology Sector: Achievements and Prospects,” the economic efficiency of the mining and geological industries, production indicators, investment flows, and the real results of transformation are examined through quantitative analysis. In this context, the private sector is primarily reflected in increased cooperation and the growth of local production. In the materials of the Ministry of Mining Industry and Geology, institutional reforms of the sector, tax and political incentives, regulatory conditions created for investors, international cooperation, and systemic modernization are applied as the main methodological approach. Here, the role of the private sector is mainly revealed through the liberalization of the investment environment. The map below (Figure 1) reflects the geological structure of the Republic of Uzbekistan and the distribution of mineral resources. The map compiles key data on the country’s geology SCIENCE AND INNOVATION INTERNATIONAL SCIENTIFIC JOURNAL VOLUME 4 ISSUE 12 DECEMBER 2025 ISSN: 2181-3337 | SCIENTISTS.UZ 15 and was prepared by the State Committee on Geology and Mineral Resources and the Research Institute of Mineral Resources. It clearly demonstrates the geological diversity of Uzbekistan, including the composition of geological layers in mountainous, plain, and desert zones. More than 60 types of mineral resources are indicated on the map, differentiated by their geographical location, mineral type, and deposit scale. The main types include:  Gold, copper, and zinc deposits are mainly located in the Navoi, Tashkent, Jizzakh, and Kashkadarya regions. The largest deposits include Muruntau, Zarmitan, and Almalyk.  Uranium deposits are widely distributed in the desert areas of the Navoi and Bukhara regions.  Coal, oil, and gas fields are concentrated in the Fergana Valley, Surkhandarya, and Kashkadarya regions.  Salt, phosphorite, gypsum, cement raw materials, and other construction materials are found in almost all regions of the country. Figure 1. Geological structure of the Republic of Uzbekistan and the distribution map of mineral resources. The rational use of these resources is a crucial task for the economic development of the country. Therefore, the metallurgical and mining industries are considered among the leading sectors of the national economy. In 2023, the share of this sector in GDP amounted to 6%, and USD 1.5 billion in investments were attracted, which clearly demonstrates its importance [3]. In addition, in 2022, gold exports reached nearly USD 5 billion, accounting for 20–25% of the country’s total export revenues [3]. The importance of the mining and geology sector for Uzbekistan has thus been demonstrated. Now the question arises: what role does this sector play in shaping the country’s key macroeconomic indicators? Over the past decade, the mining industry of the Republic of Uzbekistan has demonstrated stable growth dynamics (Figure 2). In 2010, the gross value added SCIENCE AND INNOVATION INTERNATIONAL SCIENTIFIC JOURNAL VOLUME 4 ISSUE 12 DECEMBER 2025 ISSN: 2181-3337 | SCIENTISTS.UZ 16 of the sector amounted to 3.2 trillion soums, while by 2024 this figure had increased to 44.5 trillion soums, indicating an almost 14-fold growth over the period. During 2010–2016, growth rates remained relatively moderate, as this period was mainly characterized by the gradual modernization of existing deposits and step-by-step geological exploration. However, starting from 2017, rapid growth was observed in the sector. This was driven, on the one hand, by industrial diversification and the implementation of new investment projects, and on the other hand, by technological modernization in gold and uranium extraction. During 2018–2019, the sector’s volume nearly doubled, which further strengthened the strategic importance of the mining industry in the economy of Uzbekistan. Figure 2. Growth of the gross value added of Uzbekistan’s mining industry in 2010–2024 [4]. In 2020, a slight decline was observed due to the pandemic and instability in global commodity markets; however, from 2021 onward, the sector returned to a growth trajectory. As of 2024, the mining industry has become one of the key components of the country’s GDP, playing an important role not only in generating export revenues, but also in ensuring regional economic activity, creating new jobs, and attracting private sector participation. Legal and Institutional Framework for Private Sector Activity in the Mining and Geology Sector. During the years of independence, the Republic of Uzbekistan identified the development of the mining and geology sector as one of its strategic priorities. This sector is one of the core pillars of the national economy and is of particular importance in terms of rational management of natural resources, expansion of export potential, and attraction of private investment. In recent years, a number of legislative acts have been adopted to ensure the active participation of the private sector in this field. First of all, the revised Law of the Republic of Uzbekistan “On Subsoil” (October 31, 2024, No. ORQ-987) created a legal basis for private entities in this sector [5]. According to this law, subsoil resources remain state property; however, the right to explore and extract them may be granted to private enterprises in the form of licenses or usage rights. The law strengthened mechanisms to ensure environmental requirements, transparency, and competition in the use of resources. Most importantly, the private sector has now gained the opportunity to participate directly in mining and geological activities. SCIENCE AND INNOVATION INTERNATIONAL SCIENTIFIC JOURNAL VOLUME 4 ISSUE 12 DECEMBER 2025 ISSN: 2181-3337 | SCIENTISTS.UZ 17 In addition, the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated October 4, 2023, “On the Procedure for Issuing Permits for Mining Activities,” introduced a “single-window” licensing system for private companies [6]. This decision simplified the process of investing in mining projects and reduced administrative barriers. From now on, permit procedures are carried out through electronic platforms. Furthermore, the Regulation adopted in 2025 “On the Subsoil Fund and the Procedure for Accounting Geological Works” established a system of information exchange between the public and private sectors [7]. Through this mechanism, the openness of geological data, their provision to investors, and opportunities for use for scientific research purposes have been significantly expanded. Moreover, by a Presidential Decree, measures were defined to improve the efficiency of the Inspection for Control in the Field of Geology and Mining [4]. This decree aims to establish a transparent supervision system for private companies, reduce corruption risks, and introduce technical regulations in line with international standards. As a result of the above legal and institutional reforms, the inflow of foreign and domestic direct investment into Uzbekistan’s mining sector has increased significantly. In particular, during 2022–2024, more than 25% of geological exploration works were carried out by private companies [8]. This has become an important factor in shaping a competitive environment alongside the public sector. Overall, the legal framework formed in recent years has created a foundation for restructuring the mining industry based on the public–private partnership model. This approach serves as a solid basis for the diversification of Uzbekistan’s economy, the transition from raw material exports to the production of finished goods, and the introduction of geological and technological innovations. Conclusion and Recommendations. One of the most effective mechanisms for expanding the share of the private sector in Uzbekistan’s mining industry is the proposed introduction of the National Open Geological Data Platform (OGDP). The main objective of the platform is to digitize, systematize, and provide open and free access to all geological data available on the state balance for the private sector. Such an approach would significantly reduce information asymmetry for investors, accelerate investment decision-making, and strengthen healthy competition in the sector. At present, the closed nature of geological information remains one of the biggest barriers for the private sector. Due to insufficient access to data on deposit profitability, reserve volumes, drilling results, or the history of exploration works, investment risks increase. The implementation of the OGDP would eliminate this uncertainty and expand opportunities for evaluating geological sites. The experience of countries such as Australia, Canada, and Chile shows that the openness of geological data is one of the fastest and most effective tools for attracting private investment to the mining industry. The introduction of this platform in Uzbekistan would, first and foremost, accelerate investment inflows. According to analytical estimates, an open data system could reduce exploration costs by 20–30% and increase the volume of direct private investment by 1.5–2 times within three years. In addition, increased competition in tenders for mining sites would generate additional revenues for the state budget in the form of bonus and royalty payments amounting to USD 300–400 million annually. Moreover, the digitization of geological data will stimulate the development of the local services sector. In particular, demand for drilling services, laboratories, geological consulting, and mining technology suppliers will increase. According to forecasts, the size of the services market may double within five years, and 10,000–15,000 new jobs could be created in the sector. SCIENCE AND INNOVATION INTERNATIONAL SCIENTIFIC JOURNAL VOLUME 4 ISSUE 12 DECEMBER 2025 ISSN: 2181-3337 | SCIENTISTS.UZ 18 The OGDP will also play an important role in reducing corruption risks. The transparency of data will eliminate uncertainties in the licensing process and enhance the transparency of administrative procedures. This, in turn, will further stabilize the investment environment and strengthen the country’s position in international business indices. Overall, the introduction of the open geological data platform will contribute to the development of Uzbekistan’s mining industry based on the public–private partnership model. This mechanism will not only increase the inflow of private capital but also make it possible to raise the share of the mining sector in GDP to 7–8% by 2030. Thus, the platform will become a key institutional instrument for economic diversification, the creation of higher value added, and the acceleration of advanced technologies in the field of geology. REFERENCES 1. Invest Uzbekistan, Natural Resources. Havola: https://invest.miit.uz/en/whyuzbekistan/natural-resources 2. Central Asian Countries Geoportal of Uzbekistan, Geological and mineral resource map of Uzbekistan. Havola: https://www.geoportal-uz.org/geological-and-mineral-resource-map-ofuzbekistan/ 3. Invest Uzbekistan, Metals and Mining. Havola: https://invest.miit.uz/en/investmentguide/metals 4. SIAT, Tarmoqlarning yalpi qo‘shilgan qiymati hajmi (joriy narxlarda, yillik). Havola: https://siat.stat.uz/reports-filed/548/table-data 5. Law of the Republic of Uzbekistan “On Subsoil” No. ZRU-987, 31 October 2024. Rasmiy manba: https://lex.uz/en/docs/7195382 6. Cabinet of Ministers Resolution “On the Procedure for Issuing a Permit for Mining Activities,” 4 October 2023. Manba: https://daryo.uz/en/2023/10/04/uzbekistans-ministry-ofjustice-registers-rules-for-mining-activity-permits 7. Regulation “On the Subsoil Fund Management and Geological Work Accounting,” Resolution No. 467, 26 July 2025.Manba: https://www.uzdaily.uz/en/uzbekistan-adopts-newrules-for-subsoil-fund-management-and-geological-work-accounting 8. Presidential Decree “On Measures to Improve the Efficiency of the Inspection for Control in the Field of Mining and Geology,” 2025. Manba: https://securex.uz/en/news/a-presidentialdecree-has-been-adopted-on-the-effective-organization-of-the-activities-of-the-inspectionat-the-ministry-of-geology 9. UzDaily (2024). “Private sector participation in geological exploration in Uzbekistan reaches 25%.” Manba: https://www.uzdaily.uz/en