SPECIAL REPORT | URANIUM
Uranium and unrest in Kazakhstan
Kazakhstan has 12% of the world’s uranium resources and is the world’s largest uranium producer. How has the recent unrest in the country impacted the market?
AN INCREASE IN URANIUM PRICES hit commodities headlines in early January, after violent protests erupted in Kazakhstan, the world’s largest uranium mining country. Dealers estimated that over 1 million pounds of uranium were traded on 5 January, as fears of nuclear fuel shortages spurred physical uranium funds to increase their stocks. But the upswing was relatively small compared to rising
prices earlier in the year, when two new uranium traders were building up inventory in anticipation of a long term move towards nuclear — and higher uranium prices — as a Net Zero power generation choice. Kazakhstan President Kassym-Jomart Tokayev described the January violence as an attempted coup. It was triggered by demonstrations that followed a rise in fuel prices, and according to the UK’s BBC it turned into the worst unrest in Kazakhstan’s 30 years of independence. The BBC said dozens of people are reported to have died, including 16 members of the security forces. 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 the UK government. Efforts to restore order have involved troops from other countries, notably
Russia. Russian President Vladimir Putin said that Russia would “never allow revolutions in the region”. How does that affect uranium mining in Kazakhstan? The
country has 13 uranium mines, three of which are wholly owned by state-owned Kazatomprom. The remainder are joint ventures with foreign equity holders. It is not clear whether and by how much production has
been affected. Early indications were designed to reassure. Kazatomprom chief commercial officer Askar Batyrbayev told Bloomberg on 6 January that “We are fulfilling all our obligations easily, there are no problems with uranium shipments and we will meet all delivery deadlines”. French nuclear company Orano — which owns 51% of the KATCO joint venture with Kazatomprom — told Reuters its uranium mining operations in Kazakhstan were continuing “as they are in an isolated region away from areas hit by unrest”. Cameco is one of Kazatomprom’s joint venture
partners, with a 40% share in the Inkai mine in south central Kazakhstan (Kazatomprom owns the remainder). On 6 January Cameco said, “The situation in Kazakhstan is dynamic and evolving. 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.” It said that, “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.” Inkai produces around 9 million pounds of uranium
Above: Inkai uses the insitu recovery (ISR) technique to extract uranium Photo credit: Cameco
16 | February 2022 |
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per year. But Cameco could replace that supply several times over. It noted that it has five North American uranium operations that “remain in a safe state of care and maintenance” after production was suspended “due to the weak market conditions” that total “about 24 million pounds of annual productive capacity”. These include the McArthur River mine and Key Lake mill and the Rabbit Lake mine/mill in northern Saskatchewan; and the Smith Ranch-Highland mine (Wyoming) and Crow Butte mine (Nebraska). Cameco said the mines “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.” It was not clear how long it would take to revive the sites.
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