Russia's ARMZ Acquires Stake in Uranium-Mining Joint Ventures in Kazakhstan

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Researched by Industrial Info Resources (Sugar Land, Texas)--JSC Atomredmetzoloto (Moscow, Russia), also known as ARMZ Uranium Holding Company, a subdivision of the Russian Ministry of Atomic Energy, is acquiring stakes in two joint ventures involving uranium mining in Kazakhstan from Effective Energy NV (Amsterdam, Netherlands). ARMZ will secure a 50% interest in TOO Karatau and a 25% interest in JSC Akbastau from Effective Energy for an undisclosed amount. The acquisitions will enable the consolidation of all Kazakhstan-based uranium-mining assets owned by Russian entities.

The joint ventures were set up according to an inter-governmental agreement between Russia and Kazakhstan on the use of atomic energy. The two nations have equal ownership in the joint ventures. State-owned nuclear corporation Kazatomprom (Almaty, Kazakhstan) holds Kazakhstan's 50% stakes in the joint ventures. ARMZ's acquisitions will lead to the redistribution of Russian equity stakes, while Kazakhstan's holdings in the ventures will remain unaffected.

TOO Karatau is already in commercial operation and produced 653 tons of uranium in 2008. JSC Akbastau is currently in the pre-production phase and is scheduled to commence mining operations later this year. ARMZ's acquisition of equity stakes in the joint ventures is expected to boost global uranium production by 7%.

In January of this year, India and Kazakhstan entered into a civil nuclear pact, under which Kazakhstan will supply fuel to India's nuclear power plants. Kazakhstan is likely to become India's largest supplier of fuel. Kazatomprom and Nuclear Power Corporation of India Limited (Mumbai) entered into a memorandum of understanding for cooperation in several aspects of the nuclear sector, including joint extraction of natural uranium from mines in Kazakhstan and the delivery of natural uranium and fuel for India's reactors. Kazatomprom expects to realize all plans with India within a month of signing a bilateral treaty between the two nations regarding the use of atomic energy for peaceful purposes.

Kazatomprom is set to emerge as the world's largest producer of uranium in 2009. Kazakhstan's uranium output is expected to reach 11,935 tons in 2009, registering an increase of more than 40% over last year's production of 8,521 tons. The Khorasan-1 and Khorasan-2 mines are scheduled to commence commercial operations in 2009 and will have production capacities of 3,000 tons per year and 2,000 tons per year, respectively. By mid-2010, Kazakhstan expects to complete the establishment of technical foundations required to boost the country's uranium output to 27,000 tons per year.

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