Kazatomprom uranium output falls 15% on year

In its 4Q20 Operations and Trading Update published yesterday, Kazatomprom said its production expectations for 2021 remain consistent with its "market-centric" strategy and the intention to flex down planned production volumes by 20% for 2018 through 2022. Production volume in 2021 is therefore expected to be between 22,500 tU and 22,800 tU on a 100% basis, and between 12,550 tU to 12,800 tU on an attributable basis. Without this reduction, production had been expected to be about 28,000 tU (100% basis) in 2021, according to Subsoil Use Agreements.

The company expects to sell between 15,500 tU and 16,000 tU in 2021, which includes its own sales of between 13,500 tU and 14,000 tU, consistent with sales volumes in 2020. Sales in excess of planned attributable production are expected to be sourced from inventories, from Kazatomprom subsidiaries under contracts and agreements with joint venture partners, and from other third parties.

It continues to target an ongoing inventory level of about 6-7 months of annual attributable production (roughly 6000 tU to 7000 tU, excluding trading volumes held by Trade House KazakAtom). "However, the market is being constantly monitored and, in alignment with its value strategy, Kazatomprom may carry an inventory level outside of the target range at any point in time based on seasonality, and to optimise mining and sales volumes in line with changing market conditions," it said.

Guidance for 2021 related to the company’s financial metrics will be published alongside the financial results in the 2020 Operating and Financial Review, which is expected to be released on 16 March.