Why is this important
Barsakelmes is the largest salt deposit in Central Asia (billion tons of reserves). The Kungrad Salt Free Zone will transform Karakalpakstan into a salt processing hub for the food, chemical, and pharmaceutical industries. $200 million in investments will create 2,000+ jobs in the depressed region. The status of the “Nukus” FEZ is exempt from VAT, income tax, and customs duties for 5 years.
What happened
- Kungrad Salt Free Zone in Kungrad district for the processing of Barsakelmes salt;
- 2026: $50+ million in investments, 2030: $200 million;
- First stage — 50 hectares (2025-2026), expansion to 200 hectares;
- “Nukus” FEZ status for 5 years — tax benefits.
Barsakelmes deposit
- Location: Kungrad district, Karakalpakstan, Aral Sea coast.
- Reserves: billions of tons of salt — one of the largest in Central Asia.
- Type: table salt (NaCl), suitable for the food, chemical, and pharmaceutical industries.
- The problem: salt is extracted, but not processed domestically — it is exported as raw materials to Russia, Kazakhstan, China. The industrial zone will change this.
Kungrad Salt Free Zone
- Specialization: salt processing — production of food salt, technical salt for the chemical industry, soda, chlorine, medical preparations.
- Area: 50 hectares in the first phase (2025-2026), expanding to 200 hectares.
- Investments: $50+ million in 2026, $200 million by 2030.
- Products: food salt (iodized, sea salt), technical salt (for roads, chemprom), caustic soda, chlorine, salt-based medical preparations.
“Nukus” FEZ Status
Entrepreneurs in the Kungrad Salt Free Zone will receive the status of “Nukus” FEZ participants for 5 years with the following benefits:
- Exemption from VAT on equipment imports;
- Exemption from income tax (5 years);
- Exemption from customs duties;
- Simplified visa for foreign workers;
- Freedom of currency transactions.
Stages
- 2025-2026: first stage — 50 hectares, infrastructure (roads, electricity, water), first salt processing plants ($50 million).
- 2027-2030: expansion to 200 hectares, attracting additional investors, production of soda, chlorine, medical preparations ($150 million).
Potential
- Jobs: 2000+ by 2030 in a depressed region with 20-30% unemployment.
- Export: processed salt is exported to Russia, Kazakhstan, China, Central Asia at higher prices than raw materials.
- Added value: 1 ton of raw salt costs $20-30, processed table salt — $100-150, technical — $50-80.
- Diversification: Karakalpakstan depends on agriculture (cotton, rice). The industrial zone will create an industrial cluster.
Context
- The Aral Sea disaster: The drying up of the Aral Sea exposed billions of tons of salt on its bottom. Barsakelmes is part of these reserves. Recycling salt will turn the disaster into an economic opportunity.
- Depressive region: Karakalpakstan is the poorest region in Uzbekistan with 20-30% unemployment, low income, dependence on agriculture. The industrial zone will create more than 2,000 jobs and increase income.
- “Nukus” FEZ: has been operating since 2008, attracted $500+ million in investments, created 5,000+ jobs. Kungrad Salt Free Zone — expansion of the FEZ.
- Processing against raw materials: currently, salt is exported as raw material at $20-30/ton. Processing will increase the price to $100-150/ton — 5 times the added value.
