Kazakhstan Mulls 20,000-Ton Uranium Production Target and Nuclear Future

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Written by Richard Finlayson, Senior International Editor for Industrial Info--Kazakhstan is the world's leading uranium producer, with 17,803 tons of production in 2010, representing about 33% of global uranium production. The country's umbrella uranium mining company, Kazatomprom (Almaty, Kazakhstan), has plans to mine about 20,000 tons of uranium in 2011.

However, at the recent international exhibition "Kazatompro 2011,'' the country's Deputy Minister of Industry and New Technologies, Duisenbai Turganov, said that the 20,000-ton target was the company's and not the government's goal. A revision of mining plans and uranium supply schemes is possible because of the Fukushima reactor disaster situation in Japan.

Production will depend on the Japanese government's decisions regarding nuclear power development. Shutting down the six nuclear reactors at Fukushima will lead to a reduction in uranium demand, and the amount of future demand remains uncertain.

Uranium mining and the nuclear power sector are in a phase of reappraisal, and some project plans will be altered, some cancelled. Older nuclear reactors will be shut down and new projects scrutinized for safety and environmental factors. The consensus is that now is not the time to throw the nuclear power baby out with the dirty Fukushima water. The international price of uranium (U3O8--triuranium octoxide) in the third week of April was $57 per pound, trending downward from more than $70 per pound in mid-February, before the disaster. Industry consultants see the medium- and long-term prices forecast before the disaster unchanged at about $62 and $67 per pound, respectively.

With demand pressures persisting from countries with major nuclear build programs, such as China, Russia and India, and global uranium mining meeting only 78% of the world's demand in 2010, the immediate future for uranium seems volatile as the post-Fukushima implications are factored for production targets and prices. Over the past four years, the U3O8 price has moved from about $140 per pound in 2007-08 to $40 per pound in 2010, to the current level. Canada, the world's second-largest uranium miner, produced 9,783 tons of uranium in 2010. Coming in at No. 3, Australia produced 5,900 tons.

As a key player in the uranium industry, the Kazakhstan government is refining its draft nuclear industry development program to 2014 with the regulation of uranium output under consideration. In addition to mining prospects, the government is hoping for investments in uranium conversion, the manufacturing of nuclear fuel components and the fabrication of fuel assemblies.

Significantly for the country's future nuclear plans, the government has re-affirmed its intention to build a nuclear power plant, but the final decision has not been made. The Russian VBER-300 pressurized water reactor has been under consideration for the new plant, but the U.S., France and China could be brought into the process after the nuclear industry development program is approved in the second half of 2011. Negotiations have been taking place with Russia's Rosatom (Moscow), the country's state-owned nuclear power company, about the construction of the nuclear plant and a range of nuclear cooperation topics, but, said Turganov, the parameters of this intergovernmental agreement could be changed.

Khazakhstan is determined to move away from the one-dimensional image of being just a uranium resource miner. Atomredzoloto (ARMZ) (Moscow, Russia) and Kazatomprom plan to invest $500 million in a rare earths production project. ARMZ ranks as the world's second-largest uranium mining company by resource base, with global reserves of 583,013 tons. The company is the world's fifth largest in terms of uranium output. ARMZ supplies strategic feedstock to the Russian nuclear industry. A memorandum of understanding was signed between ARMZ and Rosatom at the end of March for the project.

Kazatomprom is also engaged in a $230 million solar panel production project in partnership with French companies. Construction has started on the project in the capital city, Astana.

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