Uranium sector monitors evolving Kazakh situation

Protests that began in Atyrau and the wider Mangystau region have since 2 January spread to other cities across Kazakhstan including the country's main city of Almaty. Some cities, including Almaty and Atyrau, have seen violent clashes between protestors and police with deaths, injuries and arrests reported. The Kazakh government has imposed a nationwide State of Emergency and imposed a curfew. The internet has been blocked in large parts of the country, according to information from the UK government.

"The situation in Kazakhstan is dynamic and evolving," Cameco said on 6 January. "The national protests and the security clampdown on transport, financial and communication systems may add to pre-existing operating risks such as the COVID-19 pandemic's impact on employees and contractors, as well as global supply chain disruptions to critical goods and services required for uranium production. We will have a better understanding of the operating risks once we have had a chance to communicate with our JV partner Kazatomprom.

"As 40% of the world's uranium supply, any disruption in Kazakhstan could of course be a significant catalyst in the uranium market. If nothing else, it's a reminder for utilities that an over-reliance on any one source of supply is risky. It also reinforces the shift in risk from suppliers to utilities that has occurred in this market."

Cameco owns a 40% share in the Inkai in-situ leach uranium mine in south central Kazakhstan, with Kazatomprom owning the remaining 60%. Inkai produced 6.7 million pounds U3O8 (2577 tU) in the first nine months of 2021 and was expected to produce a total of 9.0 million pounds in the year.

Cameco said its five currently suspended North American uranium operations - the McArthur River mine and Key Lake mill and the Rabbit Lake mine/mill in northern Saskatchewan, Smith Ranch-Highland in Wyoming and Crow Butte in Nebraska - could be brought back online "should the commodity price improve to the point where the market once again calls for increased production and we have a line of sight to the appropriate homes under long-term contracts to deliver those pounds into." Together, these operations represent a productive capacity of about 24 million pounds per year.

"At present, we can't comment with any certainty on the length of time it might take to resume production at any of these facilities," the company said.

Batyrbayev: No problems

Kazatomprom Chief Commercial Officer Askar Batyrbayev has said uranium deliveries will not be affected by the protests, according to press reports. "We are fulfilling all our obligations easily, there are no problems with uranium shipments and we will meet all delivery deadlines," he told Bloomberg by phone on 6 January.

French nuclear company Orano - which owns 51% of the KATCO joint venture with Kazatomprom - said its uranium mining operations in Kazakhstan were continuing "as they are in an isolated region away from areas hit by unrest," according to Reuters.

Kazakhstan has 12% of the world's uranium resources and is the world's largest producer. Kazatomprom - the national atomic company - controls all uranium exploration and mining as well as other nuclear-related activities, including imports and exports of nuclear materials. The company is majority owned by the state through the national wealth fund Samruk-Kazyna, but was taken public in November 2018 with 15% of its shares placed on the Astana International Exchange and the London Stock Exchange. The company sells its uranium and uranium products directly from its headquarters in Nur-Sultan, Kazakhstan, and through its Switzerland-based trading subsidiary, THK.