Behind Kazatomprom’s 17% Uranium Growth: Supply Delays, Rising Costs, and Mongolia Deal

Kazakhstan’s state-owned uranium giant Kazatomprom reported mixed operational results in its third-quarter 2024 update. While the company achieved strong production and sales growth year-over-year, supply chain disruptions and cost pressures have tempered some of these gains.

In the third quarter of 2024, Kazatomprom’s uranium production increased by 17% year-over-year, reaching 3,142 metric tons, with a cumulative production for the first nine months climbing to 8,939 metric tons—a 10% increase from the previous year. This steady rise was attributed to resumed drilling activities and efforts to meet subsoil use agreements (SUAs), allowing the company to fulfill both domestic and export demand.

However, the production boost was not without challenges. Kazatomprom’s joint venture with Cameco Corporation (NYSE: CCJ), known as Inkai, reported production levels more than 20% below target due to mid-year disruptions in sulfuric acid supplies. Although these supply issues have been largely addressed, Inkai’s difficulties underscore the impact of Kazakhstan’s volatile supply chain on production stability, which may continue to pose risks.

Kazatomprom’s third-quarter sales rose sharply, up 24% year-over-year to 3,133 metric tons, primarily due to the timing of customer-scheduled deliveries rather than consistent, organic demand growth. However, total sales for the first nine months were down by 5%, with Kazatomprom selling 11,639 metric tons compared to 12,206 metric tons during the same period in 2023.

Nevertheless, the price environment has been a favorable factor for Kazatomprom this year, with its average realized price per pound of uranium concentrate reaching $68.05 in the third quarter, a 29% increase from last year’s $52.93 average. This reflects broader market dynamics, as uranium spot prices averaged $88.92 per pound in the first nine months of 2024, significantly up from $54.67 per pound during the same period in 2023.

While Kazatomprom has benefited from higher spot prices, its earnings are limited by long-term contracts with fixed pricing elements that include caps set in prior low-price periods. This structure prevents the company from fully capitalizing on high market prices, potentially constraining profit margins in quarters where a significant portion of deliveries fall under fixed-rate agreements.

On the cost side, Kazatomprom increased its unit-cost guidance, citing rising expenses for well construction and drilling materials. The new guidance places unit costs between $27.75 and $29.25 per pound, up from the previous $27.00–$28.50 range. While Kazatomprom reaffirmed its full-year production guidance, the revised cost estimates indicate that inflationary pressures are now affecting both operational and capital expenditures.

Amid these operational complexities, Kazatomprom’s recent partnership with Mon-Atom, Mongolia’s state-owned uranium company, represents a strategic move to stabilize its resource base and tap into Mongolia’s uranium reserves. This alliance, signed during Kazakh President Kassym-Jomart Tokayev’s state visit to Mongolia, aims to improve uranium exploration and production in Mongolia while leveraging Kazatomprom’s established market position and operational expertise.

CEO Meirzhan Yussupov noted that the partnership will allow the companies to “combine resources and exchange experiences and technologies,” enhancing both nations’ roles in the global uranium market.

Kazatomprom’s partnership with Mongolia’s Mon-Atom aims to expand uranium production across Central Asia by tapping into Mongolia’s substantial reserves of approximately 1.47 million metric tons. While specific targets haven’t been disclosed, both companies plan to leverage Kazatomprom’s expertise in low-cost, in-situ recovery mining—estimated at $16.50–$18.00 per pound in Kazakhstan—to boost efficient and safe production in Mongolia. This collaboration not only strengthens resource security for both countries but also offers Kazatomprom a buffer against domestic supply chain vulnerabilities, such as the recent sulfuric acid shortages impacting its Kazakh operations.

Additionally, the partnership positions both companies to better meet the growing demand for uranium in Asia’s expanding nuclear energy market, particularly from nations like China, Japan, and South Korea. By combining Kazakhstan’s 20% share of global uranium production with Mongolia’s untapped reserves, the alliance aims to increase their market share in the region, enhance production reliability, and establish Central Asia as a pivotal source of uranium for the world’s nuclear energy needs.

Kazatomprom’s collaboration with Mon-Atom is expected to mitigate some of the operational bottlenecks currently impacting its Kazakh ventures by providing access to new resources outside Kazakhstan. The partnership positions both Kazatomprom and Mon-Atom to better serve Asia’s growing demand for uranium, particularly as countries in the region increase their investment in advanced reactors and small modular reactors to reduce emissions and achieve clean energy goals.


Information for this briefing was found via sources and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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