Kazakhstan Ends Rise In Uranium Production To Stabilize Prices
Oct 04. Dow Jones. ALMATY
By Christopher Pala
After more than tripling its output of uranium in four years to become the world’s top producer, Kazakhstan has stabilized production to around 20,000 metric tons annually in order to avoid further depressing prices, Sergei Dara, Director of Strategic Development and International Projects at Kazatomprom, the state nuclear company, said Monday.
He said as long as prices remain at their current low levels, “Kazakhstan will not develop new projects and our production will remain at the current level.”
But the country may still ramp it up to 25,000 tons annually-about 40% of world production-“provided that such quantities are required by the market and we are confident we will realize a fair return on our investments,” he said.
“Prices were low in 2008 and 2009 mostly because Kazakhstan’s production was increasing so fast,” said Stanislav Chuyev, senior analyst at Visor Capital, an investment bank in Almaty, Kazakhstan’s financial center.
“Keeping production at 20,000 tons will help level the prices.”
When production jumped from 8,521 tons in 2008 to 14,020 tons in 2009, Kazakhstan became the world’s largest supplier of uranium. The rise continued in 2010, to 17,803 tons and is expected to be 19,800 tons this year and next year, Dara said.
Also, Kazatomprom, despite already operating some 20 mines in partnership with France’s Areva SA (ARVCY), Russia’s Rosatom, and Canada’s Cameco (CCJ) and others, is continuing a policy of acquiring interests in downstream production plants so it can earn profits from processing operations, not just mining and selling uranium.
“Kazakhstan is looking to be involved in every stage of the cycle except fuel reprocessing and waste disposal,” said Michael Carter, CEO of Visor.
IFASTAR, a new French-Kazakhstani joint venture at the Ulba Metallurgical Plant in Usk Kamenogorsk, eastern Kazakhstan, which was once one of the main suppliers of fuel pellets for Soviet reactors, is preparing to produce fuel assemblies to power nuclear power plants to the specifications of Areva-designed plants around the world. Fuel assemblies, the core of a nuclear power reactor, are assemblies of metallic tubes filled with ceramic pellets containing uranium dioxide powder.
The joint venture, 49% owned by Kazatomprom and 51% by Areva, will have a nominal capacity to produce 400 metric tons of refined uranium in pellets annually, with the first customer set to be China, for whom Kazakhstan is now the principal supplier of natural uranium.
The Ulba plant has already produced two tons of fuel pellets for another China customer as a test run, and is due to start commercial deliveries to China shortly, Dara added.
This year, Kazatomprom is expected to produce about 11,000 tons or uranium, more than either Canada or Australia, with profits expected to be $500 million, Dara said.