Kazakhstan's Kazatomprom Says the Era of "Cheap Uranium" Is Fading

Meirzhan Yussupov, CEO of Kazakhstan's national atomic company Kazatomprom, said during a semi-annual financial results conference call that the global uranium market is entering a new supply-demand phase and the era of "cheap" uranium is fading. The company also disclosed arrangements for natural uranium concentrate trading and the latest updates on the delay of the TQZ sulfuric acid plant project.

Yussupov said that 38 countries worldwide have signed commitments to support tripling nuclear power capacity by 2050, with these countries collectively accounting for more than 70% of global GDP. In his view, nuclear energy development has moved beyond policy discussions and entered the stage of actual deployment.

He noted that accelerating demand growth is converging with a more disciplined business environment. Long-term uranium price indicators remain stable and have risen to 18-year highs, providing a solid foundation for future long-term contract negotiations. The market also shows a trend of pricing power returning to producers, with companies holding proven large-scale uranium resources gaining stronger negotiating positions; meanwhile, power utilities are shifting their procurement strategies from reliance on short-term spot markets toward prioritizing long-term inventory security.

Kazatomprom's consolidated revenue for the first half of the year increased by 9% year-on-year, approaching 718 billion tenge, approximately US$1.57 billion. Yussupov stated that this performance reflects the company's financial discipline and the improving uranium market environment. However, he also pointed out that the industry as a whole is facing upward pressure on uranium production costs, and Kazatomprom is no exception.

"The new reality shows that the era of 'cheap' uranium is fading. But the urgent demand for safe, baseload, zero-emission electricity is stronger than ever." Yussupov said that global power companies have recognized this shift, and the company believes long-term uranium demand will remain stable and robust.

Alongside the results announcement, Kazatomprom stated that it has reached an agreement with State Nuclear Uranium Development Corporation (SNURDC) on a spot sales contract for natural uranium concentrate. SNURDC is a subsidiary of State Power Investment Corporation.

Kazatomprom has also reached an agreement with Uranium One Group JSC to sell natural uranium concentrate to Russia's Siberian Chemical Plant JSC through physical delivery. Uranium One Group is the main operator of Rosatom's overseas uranium mining assets and also participates in several joint ventures with Kazatomprom in Kazakhstan.

Kazatomprom stated that due to confidentiality clauses, the prices, volumes, and delivery arrangements of the two transactions will not be disclosed for now, but the transaction parameters are consistent with current market conditions and market trends. The relevant agreements will be submitted for review at the company's extraordinary general meeting scheduled for September 11.

Kazakhstan has also recently made several amendments to laws related to mineral resource utilization, with some of these amendments taking effect in early September. The revisions involve arrangements for transferring uranium mining licenses to the national operator and stipulate the minimum equity stake Kazatomprom should hold in any entity to which a license is transferred.

Another amendment adjusts the legal framework for uranium exploration from a licensing system to a contract system, namely the mineral resource use agreement regime. Newly issued mineral resource use agreements may be extended once, for a maximum period of 5 years; the total term of uranium exploration agreements may extend up to 11 years.

Regarding project construction, Kazatomprom disclosed that its subsidiary Ortalyk LLP commissioned a new processing plant at the Zhalpak deposit in July with an annual processing capacity of 500 tonnes. The plant is planned for expansion in 2027, when annual capacity will increase to 900 tonnes.

However, the TQZ sulfuric acid plant project has experienced delays. The project contractor discovered "potential paleontological specimens" during earthworks at the site. In accordance with Kazakhstan's laws on the protection of historical and cultural heritage, construction in the affected area has been suspended pending official permission from relevant state authorities before work can resume. The company stated that specialized excavation will be carried out in the area to safely and completely recover the specimens and conduct laboratory analysis.

Sulfuric acid is an essential reagent for Kazatomprom's in-situ leaching uranium mining operations. In recent years, uncertainty in sulfuric acid supply has impacted the company's production plans. The TQZ sulfuric acid plant is being built by TQZ Company, a joint venture whose shareholders include the Kazakh partner of Italy's Ballestra company and Kazatomprom-SaUran LLP, holding 60% and 40% stakes respectively. The total investment in the project is estimated at approximately 113 billion tenge, about US$260 million.

Kazatomprom stated that the final extent of the impact on the TQZ project will depend on the outcomes of mandatory regulatory procedures, findings from local authority investigations, as well as progress in laboratory sample analysis and surveys of the surrounding area. If more specimens are discovered or the excavation scope expands, the project design documents may need to be revised to relocate relevant infrastructure outside the affected area.

The project was originally scheduled to commence operations in the first quarter of 2027. Due to the construction suspension, the current expected commissioning time has been postponed to between the third quarter of 2027 and the first quarter of 2028, with overall progress potentially delayed by 6 to 12 months. Kazatomprom stated that at this stage it does not expect this change to have a material impact on its uranium mining operations, and the company will assess potential impacts and coordinate existing sulfuric acid sources, with the results to be incorporated into 2027 production expectations.