The world’s largest producer of Uranium has gone on to say that its sales have jumped by 65 percent. The Kazakhstan-based Kazatomprom is the world’s largest producer of natural uranium, having almost total access to one of the world’s largest uranium resource bases while producing other rare earth metals as a secondary source of revenue.
The company went on to say that they expect further growth in 2019 backed by higher uranium prices, adding that it had seen a 112 percent jump in 2018 adjusted profits driven by high sales volume and prices, according to Reuters.
Uranium supplies are expected to fall while demand will likely increase. “Seven years of oversupply since the Fukushima incident finally resulted in production cuts from the world’s largest uranium miners in Kazakhstan and Canada,” said Geologist Mickey Fulp. “Removal of excess mine supply from the market has resulted in a 40-percent jump in the spot price since April.”
While Uranium as a commodity performed well in 2018, significant production cuts left many worried about its future. Back in 2017, Kazakhstan announced it would cut its production by 20 percent over three years. Additionally, other countries such as Canada have seen closures in their uranium mines.
“We had expected more significant uranium mine production cuts, and we have now seen this with the cuts being very significant — particularly the closure of Cameco’s Macarthur River, which in oil terms would be akin to Saudi closing off all its taps,” added Craig Perry, CEO of IsoEnergy (TSXV: ISO). “What we hadn’t expected was that the demand side would pick up considerably — and this is now happening in a major way.”
Overall, uranium is becoming an increasingly popular energy source as a replacement to conventional fossil fuels. At the same time, many analysts recognize that with most of the world’s uranium supplies comes from countries closely allied to Russia. The country has been pursuing a policy of gobbling up international uranium assets, with perhaps the most news-catching occasion being the Uranium One scandal back in 2016. Regardless, analysts are anticipating the eastern country to dominate the uranium markets in the coming years, just as when most third-world country’s demand for the energy metal to skyrocket.
In light of this perspective, Kazatomprom’s drastic increase in sales might be the canary in the coal mine for the coming shift in the uranium market.
Kazatomprom Company Profile
Kazatomprom JSC NAC produces and sells uranium and uranium products. It also manufactures and sells beryllium and tantalum products; produces, transfers, and sells electric and heat energy; produces and sells potable, technical, and distilled water; transports sea water and gas; provides communication and security services; mines rare-earth metals; and produces semiconductor materials.
In addition, the company offers research, project, development, and engineering consulting services; explores for, extracts, and processes molybdenum-copper ores; produces and sells metallurgical and polycrystalline silicon; recycles silicon production waste; and produces solar quality silicon, silicon and photovoltaic slices, and photovoltaic modules.
Further, it provides drilling services; monitors radiation level and environment conditions; and offers procurement and transportation services. Additionally, it implements the construction and operation of nuclear electric stations. It operates in the Republic of Kazakhstan and internationally. Kazatomprom JSC NAC was founded in 1997 and is based in Astana, the Republic of Kazakhstan. – Bloomberg