WNA reported in February, 2021 that in summary:
- Kazakhstan has 12% of the world's uranium resources and in 2020 produced about 19,500 tU.
- In 2009 it became the world's leading uranium producer, with almost 28% of world production. In 2019, Kazakhstan produced 43% of the world's uranium.
- A single Russian nuclear power reactor operated from 1972 to 1999, generating electricity and desalinating water.
- Kazakhstan has a major plant making nuclear fuel pellets and aims eventually to sell value-added fuel rather than just uranium. A fuel fabrication plant is being built with 49% Chinese equity.
Kazakhstan has been an important source of uranium for more than 50 years. Over 2001 to 2013 production rose from 2022 to about 22,550 tonnes U per year, making Kazakhstan the world's leading uranium producer. Capacity is around 25,000 tU/yr. In 2019 production was 22,808 tU, up from 21,705 tU the year before. In 2020 Kazatomprom produced 19,477 tU, down from recent totals due to the impact of coronavirus. In August 2020, the company stated that it expected to produce 22,000-22,500 tU in both 2021 and 2022.
Of its 17 mine projects, five are wholly-owned by Kazatomprom and 12 are joint ventures with foreign equity holders, and some of these are producing under nominal capacity. In 2019, Kazatomprom's financial results show 13,291 tU – 25% of world production, putting it ahead of Orano, Cameco and Uranium One.
Mines
At a corporate and project level in mining, the following table summarises international equity links:
Inkai JV (Inkai mines)
Cameco 40%
Betpak Dala JV (South Inkai, Akdala mines)
Uranium One 70%
$350 million for 70% in 2005
Appak JV (W.Mynkuduk)
Sumitomo 25%, Kansai 10%
$100 million total in 2006
JV Karatau (Budenovskoye 2 deposit)
Uranium One 50% (bought from ARMZ in 2009)
117 million Uranium One shares (giving 19.9% ownership) + $90 million
Akbastau JSC (Budenovskoye 1, 3, 4 deposits)
Uranium One 50% (bought from ARMZ in 2010)
Zhalpak
CNNC 49%
Katco JV (Moinkum, Tortkuduk mines)
Orano 51%
$110 million in 2004
Kyzylkum JV now Khorosan-U (Kharasan 1 mine)
Uranium One 30%, Energy Asia (Japanese + 40.05% Kazatomprom) 20%
$75 million in 2005 for 30%, $430 million total in 2007 (both mines)
Baiken-U JV (Kharasan 2 mine)
Energy Asia (Japanese + 40.05% Kazatomprom) 47.5%
$430 million total in 2007 (both mines)
Semizbai-U JV (Irkol, Semizbai mines)
CGN 49%, also CNEIC
Zarechnoye JSC (Zarechnoye & S.Zarechnoye mines)
Uranium One 49.67% (bought from ARMZ in 2010), Krygyzstan 0.66%
ARMZ paid $60 million total
Early in 2012 Kazatomprom announced that it would increase its share in mining activities nationally from 46% to 51% by buying out Japanese (and possibly some Uranium One) equity in the Kyzylkum and Baiken-U JVs, where it held 30% and 5% respectively. Both JVs are mining the Kharasan deposit in the western part of Syrdarya province. In 2014 Khorosan-U was set up by Kazatomprom to take over from Kyzylkum the mining of Kharasan 1 in JV with Energy Asia (36%) and Uranium One (30%). In 2018 Kazatomprom's ownership of the Baiken-U, Kyzylkum and Khorosan-U joint ventures became 52.5%, 50% and 50% respectively after it bought a 40.05% share in Energy Asia (BVI) Ltd and a 16.02% share of Khorosan-U.
Earlier in 2009 investigations were launched into how, and at what prices, certain Kazakh entities came to hold title to particular mineral deposits before those rights were sold to international investors, particularly some of those above. In June 2009 Kazatomprom reassured its foreign joint venture and equity partners in uranium mining, from Japan, Russia, Canada, France and China that existing arrangements with foreign partners would not be changed, despite criminal charges being laid against former Kazakh executives.
The transfer to Uranium One of ARMZ's half shares in Akbastau and Zarechnoye (valued at $907.5 million) in 2010 involved payment by ARMZ of $610 million in cash (at least $479 million of which would be paid directly to shareholders – other than ARMZ – as a change of control premium) and ARMZ increasing its shareholding in Uranium One from 23% to at least 51.4% through a share issue. It subsequently took over the whole company.
Uranium Trading
In April 2017 Kazatomprom announced the formation of a Swiss-based trading subsidiary TH Kazatom, to bring greater liquidity to the uranium market from late in the year. It will buy and sell on the spot market as part of its corporate transformation to align its pricing mechanism with “the way our customers want to buy”, especially in European and US markets.
Uranium Mining
Uranium exploration started in 1948 and economic mineralisation was found is several parts of the country and this supported various mines exploiting hard rock deposits. Some 60 uranium deposits are known, in six uranium provinces. Reasonably assured resources plus inferred resources to $130/kgU were 956,241 tU in 2018.
In 1970 tests on in situ leach (ISL) mining commenced and were successful, which led to further exploration being focused on two sedimentary basins with ISL potential. Up to 2000 twice as much uranium had been mined in hard-rock deposits than sedimentary ISL, but almost all production is now from ISL. Uranium production dropped to one-quarter of its previous level 1991 to 1997, but has since increased greatly.
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Electricity Sector
Total generation (in 2018): 108 TWh
Generation mix: coal 74.8 TWh (70%); natural gas 21.5 TWh (20%); hydro 10.4 TWh (10%); wind 0.5 TWh; solar 0.4 TWh.
Import/export balance: 3.5 TWh net export (1.6 TWh import; 5.0 export)
Total consumption: 80 TWh
Per capita consumption: c. 4400 kWh in 2018
Source: International Energy Agency and The World Bank. Data for year 2018.
Kazakhstan has northern and southern electricity grids with some connection, and links to Russia, and to Kyrgystan and Uzbekistan, respectively. On 1 January 2020 the Kazakhstan Electric Grid Operating Company (KEGOC) reported installed capacity of 22.9 GWe, of which 19.3 GWe was available.
Energy Policy
In 2012 the government's energy system development plan had 150 TWh/yr production in 2030, with 4.5% of this from nuclear and 10% from renewables. In November 2012, the Minister of Industry and New Technologies said KZT 9.4 trillion (around $62 billion) would be invested in the power generation sector by 2030, approximately 40% of which would be in transmission and distribution.
In December 2012, the President launched Strategy Kazakhstan-2050: A New Political Course of the Established State, which aims to place the country within the top 30 most developed nations in the world. In line with the strategy's aim to "move swiftly towards a low-carbon economy," the May 2013 decree #557 on the Concept for the Transition of the Republic of Kazakhstan to Green Economy outlines a target for the power sector to achieve a 50% share of alternative and renewable energy by 2050, including 1.5 GWe of nuclear capacity by 2030 and 2.0 GWe by 2050.
The question of nuclear power in Kazakhstan has been discussed for many years, notably since 2006 with Russia, and a national nuclear strategy was expected in 2018. Kazatomprom is the national atomic company set up in 1997* and owned by the government. It controls all uranium exploration and mining as well as other nuclear-related activities, including imports and exports of nuclear materials.
* Prior to Kazatomprom’s establishment, other arrangements pertained for uranium development. One of these was with Canada-based World-Wide Minerals Ltd (WWM), under a 1989 bilateral investment treaty between Canada and the USSR.*
WWM invested heavily in the country over 1996-97, upgrading and operating the Tselinny (TGK) uranium mining and processing facilities at Stepnogorsk, with an option to acquire 90% equity in them as well as developing additional mines. WWM and subsidiaries entered into agreements with the Kazakh government, but claims that the government frustrated its endeavors, leading to a loss of more than $50 million and its exit from the country. In January 2016 an international arbitral tribunal upheld WWM’s claims under investor-state arbitration and dismissed Kazakh objections. WWM is seeking $5 billion settlement.
International Collaboration
Kazatomprom has forged major strategic links with Russia, Japan and China. It held a significant share in international company Westinghouse, but sold this in 2017. Canadian and French companies are involved with uranium mining and other aspects of the fuel cycle.
Russia
In July 2006 Russia and Kazakhstan (Kazatomprom) signed three 50:50 nuclear joint venture agreements totalling US$ 10 billion for new nuclear reactors, uranium production and enrichment. The first JV with Atomstroyexport is JV Atomniye Stantsii for development and marketing of innovative small and medium-sized reactors, starting with OKBM's VBER-300 as baseline for Kazakh units. Russia's Atomstroyexport expected to build the initial one.
The second JV with Tenex, confirmed in 2008, is for extending a small uranium enrichment plant at Angarsk in southern Siberia (this will also be the site of the first international enrichment centre, in which Kazatomprom has a 10% interest). It will eventually be capable of enriching the whole 6000 tonnes of uranium production from Russian mining JVs in Kazakhstan. See Fuel Cycle section below.
The uranium exploration and mining JVs Akbastau and Karatau with Tenex started with Budenovskoye in the Stepnoye area of south Kazakhstan, which commenced production in 2008. These complemented the Zarechnoye JV 250 km to the south which was set up in June 2006. However, in 2009 and 2010 the 50% ARMZ equity in these three was traded for an eventual 51% share of Canadian-based Uranium One Inc, which subsequently became wholly-owned by ARMZ. Uranium One Holdings (U1H) is now the holding company for all Russian uranium mining interests in Kazakhstan (and its equity in an acid plant).
In March 2011 Russia and Kazakhstan (Kazatomprom) signed stage II of this 2006 integrated cooperation program, involving uranium exploration and a feasibility study for a Kazakh nuclear power plant. Under this, and following JV development at Angarsk, Kazatomprom bought a 25% share of Russia's Novouralsk enrichment plant in 2013. (Separately, Kazatomprom has a 10% share in the International Uranium Enrichment Centre – IUEC – at Angarsk.)
At the end of May 2014 several agreements were signed between Rosatom and NAC Kazatomprom. One was a MOU for construction of a nuclear power plant using VVER reactors and with capacity up to 1200 MWe. It also involved fuel fabrication and nuclear waste management. A second agreement related to uranium mining at Kharasan-1, Akdala and South Inkai, where ARMZ has equity through Uranium One. A third agreement was a Comprehensive Development Program for Russia-Kazakhstan Cooperation in the Peaceful Uses of Atomic Energy, for nuclear power and fuel cycle matters.
Japan
In April 2007 a number of high-level agreements on energy cooperation were signed with Japan. These included some relating to uranium supply to Japan, and technical assistance to Kazakhstan in relation to fuel cycle developments and nuclear reactor construction. A further agreement on uranium supply and Japanese help in upgrading the Ulba fuel fabrication plant was signed in May 2008. Kazatomprom is keen to move from being a supplier of raw materials to selling its uranium as fabricated fuel assemblies. At the time it said that it aimed to supply 40% of the Japanese market for both natural uranium and fabricated fuel from 2010 – about 4000 tU per year. Negotiations then commenced for a bilateral nuclear cooperation agreement between Kazakhstan and Japan. In May 2011 a high-level intergovernmental agreement on developing nuclear energy was signed.
Earlier in August 2006 the Japan Bank for International Cooperation had signed an agreement with Kazatomprom to support and finance Japanese firms in developing Kazakh uranium resources to supply Japan's power generation. In April 2007 several Japanese companies – the Energy Asia consortium – bought 40% of the whole Kharasan mine project. Initially, Energy Asia comprised Marubeni 55%, Tepco 30%, Chubu 10% and Tohoku 5%. When Toshiba agreed to sell part of Westinghouse to Kazatomprom, it agreed to buy 9% of Kharasan from Marubeni (i.e. 22.5% of the Japanese stake). Then Kyushu Electric Power Co bought 2.5% of the Japanese stake, leaving Marubeni with 30%. The Energy Asia consortium share involved with both JVs (Kyzylkum and Baiken-U) became: Marubeni 30%, Tepco 30%, Toshiba 22.5%, Chubu 10%, Tohoku 5% and Kyushu 2.5%. In 2018 Kazatomprom bought a 40.05% share in Energy Asia (BVI) Ltd and a 16.02% share of Khorosan-U.
In March 2009 three Japanese companies – Kansai, Sumitomo and Nuclear Fuel Industries – signed an agreement with Kazatomprom on uranium processing for Kansai plants. In March 2010 a joint venture with Sumitomo was set up: Summit Atom Rare Earth Company, and in June, Kazatomprom and Toshiba agreed to set up a rare earth metals joint venture.
Earlier in September 2010, based on an April 2007 agreement, Japan Atomic Power Co, Toshiba and Marubini signed a technical cooperation agreement with the National Nuclear Centre (NNC) to study the feasibility of building nuclear power capacity. A further agreement to this end was signed in February 2013, between Japan Atomic Power Co (JAPC) and Marubini Utility Services, with NNC (see section below). At the same time an agreement between NNC and the Japan Atomic Energy Agency (JAEA) with JAPC concerned mining and processing of uranium and rare earth minerals. In October 2015 a further agreement between Kazatomprom, JAPC and Marubini Utility Services was signed, to develop cooperation on construction and financing of a nuclear power plant, involving consultations, exchange of experience in public communications, organization of technical workshops and meetings of experts on security and the training of staff.
In June 2012 and February 2013 R&D agreements between NNC and JAEA were signed relating to the design, construction and operation of the Kazakhstan high-temperature gas-cooled reactor (HTR) of about 50 MW at Kurchatov. This is flagged as a national project.
In June 2015 an agreement was signed between NNC and JAEA for stage 3 of a project to investigate sodium-cooled fast reactors in Kazakhstan.
China
In December 2006 China Guangdong Nuclear Power Group (CGNPC – now China General Nuclear Corporation, CGN) signed a strategic cooperation agreement with Kazatomprom. This was followed in May 2007 by an agreement on uranium supply and fuel fabrication, and in September 2007 by agreements on Chinese participation in Kazakh uranium mining joint ventures and on Kazatomprom investment in China's nuclear power industry. This is a major strategic arrangement for both companies, with Kazatomprom to become the main uranium and nuclear fuel supplier to CGN (accounting for a large share of the new reactors being built in China). In October 2008 a further agreement was signed covering cooperation in uranium mining, fabrication of nuclear fuel for power reactors, long-term trade of natural uranium, generation of nuclear electricity and construction of nuclear power facilities. In December 2014 a further agreement was signed with similar scope but focused on establishing a joint venture in Kazakhstan for the production of 200 t/yr of fuel assemblies. In December 2015 a further agreement was signed on the fuel fabrication project, to be at the Ulba Metallurgical Plant (see Fuel cycle: front end section below). A CGN subsidiary, Sino-Kazakhstan Uranium Resources Investment Co, has invested in two Kazakh uranium mines, Irkol and Semizbai, through the Semizbai-U LLP joint venture. In 2015 CGN Mining Co bought the 49% Chinese equity in Semizbai-U.
A framework strategic cooperation agreement was signed with China National Nuclear Corporation (CNNC) in September 2007 and this was followed in October 2008 with another on "long-term nuclear cooperation projects" under which CNNC was to invest in a uranium mine. Late in 2007 Kazatomprom signed an agreement with both GCNPC (now CGN) and CNNC for them to take a 49% stake in two uranium mine joint ventures and supply 2000 tU per year from them. In February 2011 CNNC signed a contract to buy 25,000 tU.
Early in 2009 Kazatomprom signed an agreement with CGNPC for establishment of a specialized company for the construction of nuclear power plants in China, since Kazakh plans to work with Russia's Atomstroyexport developing and marketing innovative small and medium-sized reactors had been put on hold. In mid-2009 a feasibility study on this joint CGNPC project was under way, but no more has been heard since. In December 2015 both governments announced the establishment of a $2 billion fund for bilateral projects within the framework of the 'New Silk Road', now Belt & Road Initiative (BRI), the new Chinese investment programme. CGN worked with Kazatomprom to build the Ulba-FA fuel fabrication plant, which began construction in 2016 and was completed in 2020.
At the end of August 2015, among $23 billion of China-Russia deals, JSC Samruk-Kazyna, the national holding company owning NAC Kazatomprom, signed deals worth $5 billion with Chinese companies, and Kazatomprom agreed on transit of its products via China to North America.
India
In January 2009 Kazatomprom signed an agreement with India's Nuclear Power Corporation (NPCIL) to supply 2100 tonnes of uranium to India and undertake a feasibility study on building Indian PHWR reactors in Kazakhstan. NPCIL said that it represented "a mutual commitment to begin thorough discussions on long-term strategic relationship."
In July 2015 Kazatomprom signed an agreement with India's Department of Atomic Energy to supply 5000 tU to India over the period 2015-2019.
South Korea
The Kazakh Industry and Trade Ministry has held talks with South Korea's Korea Electric Power Corporation (Kepco) on uranium mining and nuclear power plant construction in Kazakhstan, apparently on Kepco's initiative.
In April 2010 Kazakhstan signed a nuclear cooperation agreement with South Korea, paving the way for export of Korean SMART 100 MWe nuclear reactors and for joint projects to mine and export Kazakh uranium.
Toshiba
At the corporate level, in 2007 Kazatomprom purchased a 10% share in Westinghouse. Toshiba had bought the company from BNFL for $5.4 billion early in 2006, and The Shaw Group then took 20% and IHI Corp. 3%. Toshiba originally envisaged holding only 51%, and this deal reduced its holding to 67%. The Kazatomprom link strengthened the company's upstream links for fuel supplies, and was to enhance its marketing of nuclear reactors (the vendor usually supplies the first core for a new reactor, and ongoing fuel services may be offered in addition). It also brought Kazatomprom more fully into the industry mainstream, with fuel fabrication in particular. However, in 2017 Kazatomprom exercised its option to require Toshiba to buy its share for $522 million
The Westinghouse link led to a decision to set up with Toshiba a nuclear energy institute in the northeastern town of Kurchatov, near Semipalatinsk, which is already a centre of R&D activity. This was announced by Kazatomprom and the Kazakh prime minister in September 2008 and was to focus on skills development in all aspects of the nuclear fuel cycle as well as reactor technology. Three research reactors are operated by the Institute of Atomic Energy at Kurchatov.
Canada, Cameco
In May 2007 Canada's Cameco Corporation signed an agreement with Kazatomprom to investigate setting up a uranium conversion plant, using its technology, and also increasing uranium production at its 60% owned Inkai mine.
In May 2016 Cameco and Kazatomprom agreed to restructure the Inkai JV, extending it to 2045 but with Cameco becoming a minority owner, with 40%. Production is to be ramped up to 4000 tU per year by about 2021. The restructuring took effect from 1 January 2018.
Earlier in June 2008 Cameco and Kazatomprom announced the formation of a new company – Ulba Conversion LLP – to build a 12,000 t/yr uranium hexafluoride conversion plant at the Ulba Metallurgical Plant (UMZ) in Ust-Kamenogorsk. Cameco would provide the technology and hold 49% of the project. A preliminary feasibility study was undertaken jointly by Kazatomprom and UMZ, then the project was put on hold. A May 2016 agreement grants Kazatomprom a five-year option to license Cameco's uranium conversion technology for constructing and operating a uranium conversion plant in Kazakhstan.
In December 2013, a prefeasibility study (PFS) for a uranium refinery in Kazakhstan was completed, to produce UO3 for further processing in Canada. The project will require government approvals for the transfer of Cameco’s proprietary uranium refining technology from Canada. In January 2014 the government referred to the proposed plant as a ‘strategic goal’, and in May 2016 the two companies agreed to complete a feasibility study on a uranium refinery producing 6000 tU per year as UO3. This would initially be owned 71.67% by Kazatomprom and 28.33% by Cameco, and Cameco's interest in JV Inkai would increase from 40% to 42.5% on commissioning of the refinery. Should the refinery be built, Kazatomprom will also be given an option to obtain UF6 conversion services at Cameco's Port Hope facility and to receive other commercial support from Cameco, whose equity in both operations might increase slightly as a result.
USA, Centrus, Converdyn
In October 2015 Kazatomprom signed an agreement with Centrus Energy to help market Kazakh uranium in the USA.
In April 2016 Kazatomprom signed an agreement with US-based Converdyn so that Kazatomprom could offer uranium for sale in the form of natural UF6, and access new markets with an “integrated product offering”, giving customers “increased supply options”. This is simply a marketing alliance, complementary to the Cameco investment in Ulba.
Also in April a Kazakh-US energy partnership agreement was signed, related to nuclear security and in particular the “conversion of Kazakhstan's research reactors and enforcement of physical nuclear security."
Areva
In June 2008 Areva signed a strategic agreement (MOU) with Kazatomprom to expand the existing Katco joint venture from mining 1500 tU/yr to 4000 tU/yr (with Areva handling all sales), to draw on Areva's engineering expertise in a second JV (49% Areva) to install 1200 tonnes per year fuel fabrication capacity at the Ulba Metallurgical Plant, and in a third JV (51% Areva) to market fabricated fuel.
In October 2009 the two parties signed another agreement to establish the IFASTAR joint venture (Integrated Fuel Asia Star – 51% Areva) to establish the feasibility of marketing an integrated fuel supply for Asian customers (i.e. selling the enriched and fabricated fuel, not simply Kazakh uranium or Areva front-end services), and of building a 400 t/yr nuclear fuel fabrication line at the Ulba plant. IFASTAR is to be based in Paris, and would market the fuel.
In October 2010 an agreement was signed to set up a joint venture company (51% Kazatomprom) to build a 400 t/yr fuel fabrication plant based on an Areva design at the Ulba Metallurgical Plant, starting operation by 2014. In November 2011 a further agreement was signed in relation to the plant. In March 2016 Areva was awarded a contract for equipment and support to the Ulba-FA plant for the fabrication of 200 t/yr of fuel assemblies for China General Nuclear Corp (CGN) reactors. Construction of the plant began in 2016, and commissioning and licencing were completed in 2020. First production from the facility is expected in late 2021 following delays due to coronavirus. It was built by a Kazatomprom-CGN joint venture.
In April 2017 a further agreement with Areva was signed to give the Katco joint venture a new long-term perspective, with the development of the South Tortkuduk (Moinkum?) project.
Iran
In March 2017 Kazatomprom contracted to supply 950 t of uranium concentrate to Iran over three years, subject to agreement by the UN Security Council.
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