Transport disruptions the wild card for Kazakh uranium shipments

  • 1/7/2022
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LONDON, Jan 7 (Reuters) - Protests in Kazakhstan have not hit the country"s uranium output so far, but if the crisis escalates and transport is disrupted, shipments of the fuel used to generate nuclear power from the dominant producer will be at risk. Days of violent unrest against a fuel price hike have prompted the government to declare a state of emergency in Kazakhstan, with soldiers shooting at protesters in its biggest city Almaty on Thursday. read more The country is the world"s top uranium producer, accounting for around 40% of global supplies estimated at 50,000 tonnes a year. An assessment by S&P Global Platts showed uranium prices had risen 8.3% since Tuesday to $45.75 a lb on Thursday, the highest since Nov. 30. Miners and analysts say inventories and idled capacity that could be restarted are expected to limit any price rallies. Kazatomprom (KZAP.KZ), , the world"s biggest uranium producer, said on Thursday it was operating normally with no impact on output or exports. CRU analyst Toktar Turbay said Kazakhstan"s uranium mines are mostly in the Turkestan region, far away from where the protests are happening. read more But concern remains about how producers will get material from mines to end-users. Around half of the uranium produced in Kazakhstan is shipped to China, with the rest going to other markets including Europe and Canada. "Transport could pose a hurdle, as material heading for China travels through Almaty," Turbay said. China however has been adding to its uranium reserves and holds more than 10 years of consumption at current levels. Turbay estimates China has stockpiled 120,000 tonnes of uranium over the last 10 years. China"s state stockpiler did not immediately respond to requests for comment. Uranium heading for Europe or Canada typically goes through Russia and the Black Sea, which avoids the Almaty region. Market sources say capacity idled because of low prices could be restarted to keep the market supplied. This includes capacity at Canada"s Cameco (CCO.TO), which said on Thursday it could resume production of roughly 24 million lbs of uranium annually in North America if needed by the global market. read more U.S.-based Energy Fuels Inc (UUUU.A) said it could start producing 500,000 lbs of uranium annually within six months if prices for the nuclear fuel rise due to the political unrest in Kazakhstan. read more "Concern is focused on the ability to transport uranium out of the country," said William Freebairn at S&P Global Platts. "Utilities are generally conservative about their uranium purchasing and they secure material from a variety of geographic regions and have strategic inventories in order to reduce this kind of geopolitical risk."

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