Kazakhstan Remains Leader in Uranium Mining, Transfers Assets to Rosatom's Subsidiaries

The national nuclear company "Kazatomprom" has released statistics for 2022. Their integrated annual report covers the transfer of assets to Rosatom, high performance and plans for this year. Orda analyzed the report.

JSC "NAC "Kazatomprom" is a national operator for the import and export of uranium, rare metals, and nuclear fuel for nuclear power plants. The majority share of the company's shares is owned by the Samruk-Kazyna Fund. The company was formed in 1997, and Mukhtar Dzhakishev took over as head in 1998. The situation with Kazatomprom at this time was "the hardest," Dzhakishev recalled in an interview with Forbes. Shortage of personnel and specialists, multimillion-dollar loans and bleak reports. However, by 2009, it was possible to turn Kazatomprom from a loss-making enterprise into a world leader in the extraction of natural uranium.

According to the report, in 2022 Kazatomprom retained its position as the largest uranium producer in the world. The company's uranium production in 2022 amounted to about 22% of the total world primary uranium production. The holding, which includes all uranium mining in Kazakhstan, accounts for about 42% of the world's uranium production in 2022.

Despite this global status, Kazakhstan has not yet advanced the processing of raw materials. Uranium acquires value only after processing – transformation into enriched raw materials, rocket fuel or fuel briquettes. Infrastructure is a must for this. There is a lack of it in Kazakhstan.

The leaders in uranium processing are China, Russia, and France. Kazakhstan can only sell ore or the shares in the enterprises themselves so far. The second option happens the most often.

Nowhere without Rosatom

According to the integrated report, Uranium One, Rosatom's subsidiary for uranium mining in Kazakhstan, became a shareholder of the Stepnogorsk Mining and Chemical Combine (SMCC).

"As part of the audited financial statements of JV Budenovskoye LLP by the end of 2022, information was received from JV Budenovskoye LLP on changes in the membership of Stepnogorsk Mining and Chemical Combine LLP, which included Uranium One Group JSC and NFC Logistics Center JSC,"

the document says.

JSC "Uranium One Group" at the end of last year owned 99.99% of the shares in the SMCC, a small share of 0.01% went to JSC "Logistics Center NFC".

The company JSC "Logistics Center NFC" provides services for the supply of fuel cargo and customs clearance of companies. It is also a part of the Rosatom State Corporation through JSC Techsnabexport.

In September 2022, the British news site Middle East Eye wrote that Rosatom could buy a 49% stake in the Budenovskoye joint venture under the Gazprombank credit line for $1.6 billion. The Russian nuclear corporation has yet to comment on this.

It should be noted that the former shareholder of SMCC was Yakov Klebanov, the son of Alexander Klebanov, a well-known Kazakhstani oligarch whose name is inextricably linked with the accidents at the Ekibastuz and Petropavlovsk CHPs.

Klebanov Jr., through Solis Ltd, owns the Rixos Hotel in Almaty and regularly receives contracts directly from various government agencies such as the Ministry of Foreign Affairs and the staff of the Constitutional Council. The company received contracts for 14 million KZT through procurement in 2021 alone.

Returning to the topic of asset transfer, at the end of February 2023, large shares of three uranium enterprises located in Kazakhstan were allowed to be transferred to Rosatom's subsidary. The news caused quite the stir.

The Ministry of Energy told Orda at the time that:

"The ultimate beneficiary of all the above companies are the state corporation Rosatom and the Ministry of Finance of the Russian Federation. The purpose of the transaction is the intra–group restructuring of the companies included in the structure of Rosatom, as well as the simplification of the corporate structure of the group of companies of JSC Uranium One Group by eliminating intermediate subholdings,"

A rhetorical question thereby arises: does the repeated transfer of assets to Rosatom mean that Kazakhstan's energy infrastructure cannot exist without Russia's helping hand?

Financial Indicators and Plans

According to the report, the company demonstrated good financial results last year. Kazatomprom's revenue amounted to more than 1,000 billion KZT. Compared to 2021, the company's profit increased by 45% (600 billion). The sales volumes of uranium oxide (U3O8 - Ed.) were also slightly higher than in 2021.

"Despite the challenges of 2022 caused by unprecedented global economic uncertainty and significant geopolitical events, Kazatomprom demonstrated good operational and financial performance and maintained its position as a world leader in the production and sales of natural uranium,"

the report says.

Although the figures are encouraging, the volume of production for 2022 was lower compared to last year. The report attributed this to the impact of the pandemic on well development in 2021. It is noted that between the development of wells and the extraction of uranium by the method of underground-borehole leaching (the main method of uranium extraction in Kazakhstan – Ed.), it takes from eight to ten months.

"Accordingly, delays and limited access to certain key materials and equipment in 2021 affected the well commissioning schedule, which led to a decrease in production in 2022 compared to 2021,"

the report says.

Kazatomprom's current plans for 2023 include the implementation of a number of measures in the field of environmental protection. It is planned to reduce the carbon footprint of products in accordance with the developed Decarbonization Strategy and achieve carbon neutrality of JSC "NAC "Kazatomprom" by 2060.

Original Author: Silam Aqbota

DISCLAIMER: This is a translated piece. The text has been modified, the content is the same. Please refer to the original article in Russian for accuracy.