Kazatomprom is a uranium producer in Kazakhstan. The Kazatomprom board recently approved a strategy to increase production volumes in 2025. It will return to a one hundred percent level relative to its subsoil use agreements for the first time since 2018. This will add up to six thousand tons of uranium to the anticipated global primary supply.
The decision was made due to improved uranium market conditions and successful medium- and long-term contracting activity with both new and existing customers. The company shared this information in its 2025 production plan. It said that 2025 production is now expected to be between thirty thousand five hundred tons and thirty-one thousand five hundred tons of uranium.
Kazatomprom announced in 2017 that it would “flex down” production by twenty percent below its subsoil use agreements from the start of 2018 for three years to better match supply with demand. It subsequently extended this decrease. However, in August of 2022, it announced plans to increase uranium production in 2024 to ten percent below its subsoil use agreements. The additional volumes that are expected to be produced in 2025 will be used to meet contractional obligations under medium and long-term contracts according to the company.
Kazatomprom remains committed to its market-centric strategy and its disciplined approach to production. Dastan Kosherbayev is the CCO of the company. He said that he is “excited to witness the start of a long-awaited historical shift in the uranium market”. He added that the company has shown “strong market discipline for seven consecutive years” in keeping its production 20% below the total subsoil use agreements.
Kosherbayev went on to say that “Consistent with our market-centric strategy, our intention to return to a 100% level of Subsoil Use Contracts production volumes in 2025 is primarily driven by our strong contract-book and already growing sales portfolio against conservative 2023-2024 production scenario. As we are seeing a clear sign that the industry has entered into the new long-term contracting cycle, driven by the recognition of the restocking needs, Kazatomprom, with its best-class and lowest cost mines, is absolutely prepared to respond to these improving market conditions. Our current contract book provides sufficient confidence that the additional volume in 2025 will have a secure place in the market and be needed to fulfil future contractual obligations.”
Kazatomprom said that it will now begin working with its joint venture partners and mining subsidiaries to incorporate the necessary changes into its 2024 budgets and development plans for the 2025 increase in production volumes. However, it added that it will "continue to monitor ongoing market developments and maintain the flexibility to react quickly to changing conditions". No decision has yet been taken regarding mine development uncertainty. It explained that geopolitical uncertainty and global supply chain issues with high inflationary pressure “remain existent and the company may therefore potentially face challenges in increasing production significantly above stated levels”.
Kazatomprom, through its subsidiaries, joint ventures and associates, produces uranium from twenty-six uranium deposits which are grouped into fourteen mining assets. All of these sources use in-situ leach technology. Subsoil use contracts are agreements with the Kazakh government which cover the production of uranium by in-situ leach methods.