20.08.2019

Kazakhstan’s JSC National Atomic Company Kazatomprom says it will continue to “flex down” production by 20% through 2021, rather than to the end of 2020 as originally planned. Full production will not resume until market conditions signal a need for more uranium, it said.

The company in December 2017 announced that it would reduce planned uranium production by 20%, compared to planned levels under Subsoil Use Contracts, over three years from January 2018. It has now said it will extend the production curtailment, in a decision which reflects the fact the uranium market is still recovering from a period of oversupply, and uranium prices remain low.

“As the largest uranium producer in the world, Kazatomprom recognises the need for global output to better align with current demand,” it said.

The full implementation of this decision would remove up to 5,600 tU from anticipated global primary supply in 2021, Kazatomprom said. The company’s 2021 production would remain below 23,000 tU (100% basis), which is expected to be in line with production in 2019 and 2020.

“Uranium recovered somewhat from the lows of 2016, but the market is still signalling that there is no need to bring back existing production capacity,” Kazatomprom CEO Galymzhan Pirmatov said. “Keeping production levels flat for now supports a return to long-term sustainability in the market, which will benefit all stakeholders. Delaying the return to planned output levels also demonstrates our commitment to the value-over-volume philosophy at the core of our strategy.”

No decision has yet been taken regarding production levels beyond 2021, the company said, adding that it continues to monitor market conditions. “However, Kazatomprom does not expect to return to full production until a sustained market recovery is evident, and demand and supply conditions signal a need for more uranium,” it said.

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