Kazakhstan protests lead to sharp growth of uranium prices in global market

By Eugene Gerden

Global uranium prices have risen sharply due to current political unrests in Kazakhstan, one of the world’s largest uranium producers.

As of now, price has increased by 8% to US$45.25 per pound, while the growth is currently ongoing. The ongoing protests in the country have already led to the fall of stocks of Kazatomprom, the largest uranium producer by 11% on the London Stock Exchange.

Currently one of the centers of protests is located in the city of Aktau, which is home to one of the key enterprises producing uranium for Russian nuclear power plants.

In addition, there is a threat of interruption of production on “Karatau” –  one of the most modern uranium mines in Kazakhstan,   which is located in the southwestern part of the Chu-Sarysu basin in the Suzak district of the Turkestan region. Last year, the mine produced 2,468 tons of uranium with 134 wells being drilled.

This is already the second major rise of price for uranium for the last several months after its growth in September 2021 by almost 25%.

According to Kazakh state sources,  in January-September 2020, uranium production in the country increased by 6%, although  Kazatomprom’s net profit decreased by 50% compared to the same period last year. The country’s uranium reserves account for 15% of the world’s overall reserves.

At present almost 100% of the Kazakh uranium output is exported to abroad, while currently Kazakhstan provides about 40% of the world’s uranium supplies. Among the major sale markets for Kazakh uranium are Russia, China, India and France.

Earlier representatives of Kazakh government and Kazatomprom promised to cut production by 20% annually until, due to current excessive supplies in the global market, caused by the decline of demand because of the pandemic.

For 9 months of 2021 uranium exports out of the country declined by 37% year-on-year basis to US$800 million, primarily in the low price category of up to US$80 per 1 kg of uranium.

According to data from the World Nuclear Association (WNA), in 2020, Kazakhstan produced 19.800 tons of uranium, which is about 41 percent of all world uranium production last year,

According to WNA, since 2012, the volume of production in Kazakhstan has exceeded 21,000 tons annually and reached 24.600 tons in 2016.

Kazakhstan’s reserves are estimated at 907,000 tons. Most of uranium in the country is produced by in-situ leaching method.

According to WNA, more than 85 percent of global uranium production accounted for 10 largest companies in terms of production, among which Kazatomprom.

Most of analysts believe an interest to uranium will only grow in the coming years, due to desire of global powers to reduce CO2 emissions to zero by the middle of the century. Therefore nuclear energy, whose output is more predictable than those of solar and wind power plants, can play an important role in this process.

The current gap between uranium production and consumption is covered by reserves, but nobody knows their real volume. According to IAEA estimates, the maximum amount of reserves potentially available for the commercial sector could be 525,000 tons of uranium.