Kazakhstan reinforcing its leadership in the global uranium race

Over the past five years, uranium output in Kazakhstan has increased dramatically from 8521 tU in 2008 to 20900 tU in 2012.

Since 2009, when Kazakhstan first became the world’s largest uranium producer, the domestic uranium industry has dominated global competitors. In 2012, Kazakhstan eclipsed its closest pursuer, Canada, by more than twofold in annual uranium production (see Figure 1).

Figure 1. Uranium production in Australia, Canada and Kazakhstan in 2001-2012, tU (data retrieved from WNA and companies’ reports). *Actual data for Kazakhstan, preliminary estimations for Canada and Australia.

Kazakhstan hopes to produce 25 ktU by 2015. Looking beyond 2015, Kazakhstan should be able to ramp-up domestic uranium output well above 25 ktU. A brief analysis of production capacity (of operating and under construction uranium mines) demonstrates that Kazakhstan will likely exceed its production target of 30 ktU per year Kazakhstan in 5-7 years (see Table 1).

Table 1. Design capacity of operating and commissioning uranium mines in Kazakhstan (data from Kazatomprom web-site and WNA reports).

Long-term, Kazakhstan has all the necessary prerequisites to raise its uranium production far beyond 30ktU annually.

Besides a well-developed uranium mining industry, Kazakhstan trails only Australia in total volume of recoverable uranium resources, and aims to increase this amount from 250 ktU to 2.25 million tU by 2020.

The primary obstacle to further expansion of the Kazakhstan uranium industry is conditions in the international uranium market.

Current spot uranium prices are at very low levels as a result of the Fukushima disaster and ramping-up of uranium production in Kazakhstan could adversely affect this highly volatile market.

This concern has been recognized by Kazakhstan authorities, who will delay both new uranium projects and expansion of existing mines in the event of declining uranium prices.