Cameco and Kazatomprom Join Uranium Production Boom

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Researched by Industrial Info Resources (Sugar Land, Texas). Under the terms of a Memorandum of Understanding (MoU) signed between Cameco Corporation (NYSE:CCJ) (Saskatoon, Saskatchewan) and Kazakhstan’s state owned National Atomic Company Kazatomprom, the two companies will study the feasibility of constructing a uranium conversion facility in Kazakhstan or at a site to be decided. Cameco will provide the technology and could possibly hold an interest of 49% in the new plant.

In addition to the cooperation on the development of the uranium conversion capacity, the partners will pursue additional uranium production which could see production from the Inkai deposit doubling and raising total production to 10.4 million pounds per annum on a schedule to be confirmed.

The Inkai project in Kazakhstan is owned by Joint Venture Inkai (JVI) Cameco (60%) and Kazatomprom (40%). JVI has regulatory approval to construct a full scale in situ recovery mine and mill that is expected to achieve commercial production in 2008, ramping up to 5.2 million pounds of annual production in 2010. Camco’s share in this total would be 3.1 million pounds. While the existing ownership would not change, Cameco’s interest in the additional capacity under the MoU would be 50% with the remainder held by Kazatomprom. Cameco’s share of the10.4 million pounds annual production would be 5.7 million pounds.

Jerry Grandey, President and CEO of Cameco said,” We are pleased to build on the longstanding business relationship we have with Kazatomprom. This MoU provides significant growth opportunities for both companies.”

“Cameco’s vision is to be a dominant nuclear energy company and we continue to look for other opportunities for uranium value added processing in Canada and around the world as the nuclear renaissance unfolds,” said Grandey.

After announcing in 2004 a target of 15,000 pounds of annual uranium output of 15,000 tons by 2010, Kazatomprom in said April that, driven by the spate of new nuclear power projects around the world, it was planning to hit 18,000 tons per annum by 2010. With the market price of uranium now moving through the $125 dollar per pound mark, Kazatomprom feel the only factor which could make prices pause is the release of weapon grade uranium by the US.

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