Kazatomprom sees no more impact on output from COVID shutdowns

Kazatomprom remobilized employees to its operations during the first half of August following a four-month reduction of non-essential staff at the outset of the pandemic. Production levels for the second half of the year are expected to be impacted by the resulting hiatus, but the company's production guidance for 2020 remains unchanged from the previously announced 19,000-19,500 tU on a 100% basis (10,500-10,800 tU Kazatomprom attributable share) .

"At this point in 2020, if wellfield development were to encounter availability, pandemic or weather-related issues, it could impact reserve development and production plans for 2021, though it would not influence 2020 production volumes," it noted.

As of September 30, year-to-date production from Kazatomprom's operations was 15,091 tU (8,309 tU attributable), down from 16,882 tU (9,844 tU attributable) for the same period in 2019.

Cameco Corporation and Orano Canada restarted operations at the Cigar Lake mine and McClean Lake mill in northern Saskatchewan in September, but Kazatomprom noted there have been "very few published details" on the ongoing operational status of mines elsewhere.

"Taken together, the impact of the actions taken by the world's uranium producers is expected to result in a 2020 primary supply reduction of up to 14% compared to 2019 (according to third-party sources), pushing supply-demand into an annual deficit (compared to the previous expectation of 2020 being roughly in balance), "it said.

Its ongoing inventory levels are expected to fall below a target of six to seven months of annual attributable production in 2020 and 2021, with no opportunity to catch up on recent production losses. It will continue to monitor market conditions for opportunities to optimize its inventory levels, and it has purchased small volumes in the spot market during the second and third quarters, it said.