The world’s top uranium-producing company announced Friday that it expects production challenges for the next two years due to construction and supply issues.
Kazakhstan’s state-run Kazatomprom (FRA: 0ZQ) (LON: KAP) says a lack of sulphuric acid, used to extract uranium from raw ore, is one of the main problems. Shortages of the commodity in regional and international markets combined with high demand for it in agricultural and industrial sectors left the uranium producer with less than it required this year.
The company anticipates delays in the completion of construction at its newly developed deposits. The issues are expected to persist into 2025.
“While actively pursuing alternative sulphuric acid supplies, current projections indicate that the company’s intention to achieve 90 per cent production volume as per subsoil use agreements in 2024 may be challenging,” the company said in a news release.
Kazatomprom agreed to increase production volumes to that level this year in 2022. However, it is now encountering issues following through on its commitment.
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Kazatomprom partners with Japanese companies for energy security
The uranium producer also revealed at the end of the work week that it had signed a memorandum of understanding with Furukawa Electric Power Systems and Sumitomo Corporation (TYO: 8053).
The companies will conduct a pilot project to test the efficacy of technology used to prevent ice from accumulating on power lines in the Turkestan region.
“Uninterrupted power supply is extremely important for supplying production and other facilities of a nuclear holding,” the company said.
Қазатомөнеркәсіп 2024 жылға арналған өндірістік жоспарына түзету енгізбекhttps://t.co/IvIjAr0o3A
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Kazatomprom will use Japanese technologies to automate industrial safety of energy facilitieshttps://t.co/Zwp8IiQfcG pic.twitter.com/GjKjzdVvkA
— Kazatomprom (@NAC_Kazatomprom) January 12, 2024
Three of the 13 uranium mining projects in Kazakhstan are wholly-owned by Kazatomprom and the others are joint ventures with foreign companies. The major uranium market player was established in 1997.
The country holds approximately 12 per cent of the world’s uranium resources. It became the top uranium-producing country in 2009 and supplied 43 per cent of the world’s uranium by 2019.
Canada sits right below Kazakhstan on the list of the world’s top producers and was number one before 2009. The country’s uranium resources primarily come from the McArthur River and Cigar Lake operations run by Cameco Corp (TSX: CCO) (NYSE: CCJ) in the Athabasca Basin.
The majority of that region’s resources remain undeveloped. Favourable market conditions have prompted an accelerated rate of exploration in the jurisdiction by companies like ATHA Energy Corp. (CSE: SASK) (FRA: X5U) (OTCQB: SASKF), Stallion Uranium Corp. (TSX-V: STUD) (OTCQB: STLNF) Eagle Plains Resources Ltd. (TSX-V: EPL) and several others.
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rowan@mugglehead.com
