Oversupply prompts Kazakh uranium production cut

Tuesday, 10 January 2017

Kazakhstan plans to produce 10% less uranium in 2017 than previously planned in response to ongoing oversupply in the uranium market, KazAtomProm chairman Askar Zhumagaliyev announced today.

KazAtomProm is cutting its planned uranium production for 2017 (Image: KazAtomProm)

In total, Kazakh uranium production for 2017 will be 2000 tU less than previously planned. The reduction is roughly equivalent to 3% of total global uranium production based on 2015 figures.

Kazakhstan's uranium mining operations are either wholly owned by state-run company Kazatomprom or operated through joint ventures between KazAtomProm with international partners. The exact production levels for each mine and joint venture have been determined and approved by their respective management boards, based on the circumstances and economics of each operation, and vary from the 10% aggregate, KazAtomProm said.

"While the outlook for nuclear energy growth continues as strong as it has been for many years, the realities of the near-term uranium market remain in oversupply," Zhumagaliyev said. "KazAtomProm and its joint venture partners have had to make responsible decisions in light of these market challenges. These strategic Kazakh mineral assets are far more valuable to our shareholders and stakeholders being left in the ground for the time being, rather than adding to the current oversupply situation. Their greater value will instead be realised when produced into improved markets in the coming years."

Kazakhstan has 12% of the world's uranium resources and has been the world's leading uranium producer since 2009. Its 2015 production of 23,800 tU accounted for 39% of world production. The country had planned to increase its production year on year to 2018.

KazAtomProm did not give a new total figure for planned 2017 production, but said that even with the reduction the company would "continue to lead global uranium production and support the growth of nuclear energy around the world". No existing customer contractual commitments are impacted by these strategic decisions, it said.

Ian Emsley, senior project manager at the World Nuclear Association said: "The announcement by the Kazakhs of a decrease in planned uranium production marks a significant change from their production practice since the late 1990s, during which time Kazakh production increased more than tenfold and fundamentally shifted the nature of global uranium mining."

Researched and written
by World Nuclear News