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The sale of a stake in a massive new uranium mine to Russia prompted an exodus of senior managers at Kazakhstan’s state-run miner.
The deal for part of the Budenovskoye mine, projected to become the world’s biggest source of the radioactive metal, to Russia’s nuclear power monopoly, Rosatom, went through at the end of last year, according to people familiar with the matter. The deal was pushed by Kazakhstan’s sovereign wealth fund against the wishes of the leadership at miner Kazatomprom, the people said, asking not to be identified discussing a sensitive matter.
A fleeting reference to the change of ownership was made in Kazatomprom’s 2022 financial overview in March and its annual report in April, though Rosatom wasn’t identified as the buyer.
Through its wealth fund, the Kazakh government holds 75% of Kazatomprom, which trades on the London Stock Exchange. The pressure to complete the deal behind closed doors prompted the loss of two CEOs, a CFO, a chief operating officer and a chief commercial officer in less than 18 months as they worried the lack of disclosure risked breaching their legal duties as company officials, the people said.
Russia accounts for half the world’s uranium enrichment capacity, supplying fuel to nuclear reactors around the world, but relies on imports of Kazakh ore to supply its plants. Gaining a stake in Budenovskoye, which is expected to account for more than 10% of global output within three years, will help give Rosatom security of supply.
The deal had apparently been discussed for several years. At the end of last year, under instruction from the sovereign wealth fund, Kazatomprom didn’t recommend the exercise of the state’s right of first refusal on a 49% stake in the venture developing blocks 6 and 7 at Budenovskoye, the people said. That allowed Rosatom to step in and pursue the deal to buy the stake, they said.
The deal comes against the background of an increasingly nuanced relationship between Kazakhstan and Russia. Although President Kassym-Jomart Tokayev relied on Russian troops to help crack down on civil unrest in January last year, since the invasion of Ukraine the Kazakh leader has been more equivocal in his relationship with Vladimir Putin’s regime and sought to maintain relations with the US and Europe.
The departures from Kazatomprom started in August 2021 with chief executive officer Galymzhan Pirmatov, who had led the company to list shares in London three years earlier. His successor, Mazhit Sharipov, left in July last year and chief operating officer Aslan Bulekbay had left in March. Chief financial officer Kamila Syzdykova and chief commercial officer Askar Batyrbayev left in December.
Pirmatov is now the governor of the Kazakh central bank. The bank’s press office said he resigned from the board at his own request to pursue other opportunities.
Batyrbayev and Syzdykova declined to comment, referring to Kazatomprom’s earlier statements. The other executives didn’t respond to requests for comment either directly or through Kazatomprom.
Kazatomprom said in regulatory filings that all the executives left for personal reasons, but their exits were sparked by concern that the deal with Russia wasn’t properly disclosed, breaching their fiduciary duties, the people said. The company didn’t respond to requests for comment for this story.
The Kazakh Energy Ministry declined to comment, referring questions to the wealth fund Samruk-Kazyna. The fund’s press office referred inquiries to Kazatomprom. Rosatom didn’t respond to a request for comment.
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