Kazatomprom has announced a 10% cut to planned uranium extraction in Kazakhstan this year in response to a prolonged glut in global supplies of the nuclear fuel.
Despite the cut, Kazakhstan will remain the world’s largest uranium producer. However, it marks the first time that the Central Asian country has lowered production since Kazatomprom was founded in 1997.
In an online report, Kazatomprom Chairman Askar Zhumagaliyev announced that the company would curtail its uranium output this year by 2,000 tonnes compared to 2016. Kazakhstan has not yet published figures for extraction of the raw material last year, although previously Astana had set a target of around 24,800 tonnes.
According to Kazatomprom, the cut equates to a 3% reduction in the global supply of uranium, based on figures for 2015 published by Australian nuclear data provider Ux Consulting (UxC).
“While the outlook for nuclear energy growth continues as strong as it has done in many years, the realities [are that the] near-term uranium market remains in oversupply,” Zhumagaliyev explained. “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.”
He noted, however, that the move would have no impact on Kazakhstan meeting contractual obligations to its uranium customers.
Over the past five years, the price of Uranium has more than halved from US$50 to around US$20 per pound, owing to a cutback in nuclear generation in Japan and a ramp up in output at some mines, including Canada’s massive Cigar Lake deposit.
Zhumagaliyev noted that Kazakhstan’s 17 uranium mines would each be given different reduction targets to follow in order to achieve the 10% cut nationally. Five of these mines are fully state-owned, while 12 are joint projects with foreign companies.
Kazakh uranium production soared from just 2,200 tonnes in 2001 to 23,800 tonnes in 2015. The country emerged as the world’s leading uranium producer in 2009 and currently accounts for around 40% of global supply of the resource. Even so, Kazakhstan lacks any nuclear generation capacity of its own, having decommissioned its only reactor, a small Soviet-built unit near Aktau, in 2001. Kazakh officials have been discussing the possibility of constructing a new plant for over 10 years, although the project has never got off the ground.