Producers announce pre-COVID uranium output

Kazatomprom today said its production for the quarter ending on 31 March was 5221 tU (on a 100% basis), down from 5294 tU for the same period in 2019. The Kazakh producer in April announced measures to reduce the risk of COVID-19 spreading to its mine sites, resulting in a lower level of wellfield development activity and thus a reduction in production volumes. It has revised its 2020 guidance due to the impact of COVID-19, and now expects its production volume for the year to be between 19,000 tU and 19,500 tU (previously 22,750 tU to 22,800 tU). The reduced production level is not expected to impact the company’s 2020 sales obligations, which implies the fulfillment of all the contractual commitments to customers, it said.

The ongoing global situation and the spread of COVID-19 has negatively impacted the construction schedule for Kazatomprom's nuclear fuel assembly plant in Kazakhstan, with lockdowns and travel restrictions imposed by many countries preventing equipment suppliers from sending the required specialists for the installation and calibration of the equipment. As a result, the planned completion and commissioning schedule for the plant will be affected and a new timeline will be disclosed once it is known, the company said.

Cameco resilient

 
In the first quarter, Cameco produce a total of 2.1 million pounds U3O8 (808 tU), down from 2.4 million pounds on the same period in 2019. It posted a net loss of CAD19 million (USD13.5 million) for the quarter, compared with a loss of CAD18 million for the same period in 2019. These results were driven by "normal quarterly variations in contract deliveries and our continued execution on all strategic fronts", it said.

Towards the end of the quarter, Cameco suspended production at Cigar Lake in Saskatchewan in response to COVID-19 and in April it extended the suspension for an "indefinite period". It also announced a temporary suspension of operations at its Port Hope uranium hexafluoride conversion plant and Blind River refinery, and withdrew its financial outlook for 2020.

Cameco CEO Tim Gitzel said the impact of the coronavirus pandemic had changed the world, but despite the disruptions to its operations the company expected its business to be resilient. "We will continue to provide the fuel required to power the nuclear reactors that will be part of the critical infrastructure needed to ensure hospitals, care facilities and other essential services are available during this pandemic," he said.

The uranium market has started to respond to disruptions resulting from the COVID-19 pandemic, Cameco said, noting that the uranium spot price had increased by more than 35% since its announcement of the first disruption at Cigar Lake on 23 March.

US production falls

 
The USA produced a total of 8098 pounds U3O8 in the first quarter, according to the EIA. This is down 79% from the fourth quarter of 2019 and down 86% from the first quarter of 2019. The USA's total uranium production for 2019 was 173,875 pounds U3O8 - the lowest annual production on record.

Four US uranium facilities - Lost Creek, Nichols Ranch, Ross and Smith Ranch-Highland, all in-situ leach plants in Wyoming - produced uranium concentrates during the quarter. This is one facility fewer than in the final quarter of 2019, when Crowe Butte in Nebraska was also in production.

The US Administration's Nuclear Fuel Working Group last month published a strategy on reviving the USA's nuclear fuel cycle in which it recognised "the importance of taking focused, deliberate action to prevent the near-term collapse of the domestic uranium mining, milling and conversion industries, and the need to support US strategic fuel cycle capabilities". It called for "immediate and bold" action to strengthen the country's uranium mining and conversion industries.