Kazatomprom Chairman, Askar Zhumagaliyev, announced today that due to the prolonged recovery in the uranium market, planned 2017 production from Republic of Kazakhstan will be reduced by approximately 10%. This will amount to a volume greater than 2,000 MtU or more than 5 million lb U3O8 reduction in 2017 planned output. For greater context, this is equal to 3% of total global uranium production (based on 2015 UxC Consulting figures).
The uranium output of Kazakhstan is produced by mining operations either wholly owned by Kazatomprom, or managed through joint-ventures with international partners. The exact production levels for each mine and JV were determined and approved by their respective management boards, and vary from the overall aggregate 10% figure. These difficult decisions were based on a strategic review of the current oversupplied uranium market, and the unique circumstances and economics of each operation. These adjustments of production levels are also consistent with the provisions of Kazakhstan sub-soil use agreements governing each operation.
Kazatomprom Chairman Askar Zhumagaliyev remarked: “While the outlook for nuclear energy growth continues as strong as it has been in many years, the realities of the near-term uranium market remain in oversupply. Kazatomprom, and its joint venture partners, have had to make responsible decisions in light of these market challenges. These strategic Kazakh mineral assets are far more valuable to our shareholders and stakeholders being left in the ground for the time being, rather than adding to the current oversupply situation. Their greater value will instead be realized when produced into improved markets in the coming years.”
Even with these reductions, Kazatomprom will continue to lead global uranium production and support the growth of nuclear energy around the world. No existing customer contractual commitments are impacted by these strategic decisions.