Uranium production at the Inkai joint venture (JV) in Kazakhstan, a project involving Cameco and Kazatomprom, has been suspended due to a bureaucratic holdup. Here are the key points:
Bureaucratic Holdup
The suspension is a result of a delayed submission of project paperwork to Kazakhstan’s energy ministry, which has not granted the necessary extension for the submission.
Ownership and Impact
Cameco holds a 40% stake in the Inkai JV, while Kazatomprom, the state-owned uranium producer, holds 60%. The Inkai JV is a significant contributor to Kazakhstan’s uranium production, accounting for approximately 14% of the country’s total uranium output and 16% of Cameco’s production.
Production and Market Implications
The suspension adds uncertainty to Kazakhstan’s near-term uranium production plans. However, Kazatomprom does not expect this to significantly impact its overall 2024 production forecast of 22,500 to 23,500 tonnes of uranium (tU).
Market Analysts’ Views
Analysts from BMO Capital Markets and Raymond James note that the paperwork approvals are expected to be resolved shortly, but the timeline for the approvals process and the resumption of operations is unclear. This could potentially lead to an increase in the spot uranium price if Cameco and Kazatomprom need to purchase additional supplies to meet their sales commitments.
Current Market Conditions
As of 31 December 2024, the uranium spot price was $73 per pound, down from its 17-year high of $100.25 a year ago. The timing of deliveries from the Inkai JV, which uses the TransCaspian International Transport Route, can also impact the timing and amount of dividends Cameco receives from the JV.
Kazatomprom’s Overall Production Plans
Despite the Inkai JV suspension, Kazatomprom has recently adjusted its 2025 production plans due to other challenges, including delays in construction and uncertainties in sulfuric acid supplies. The company now expects 2025 production to be between 25,000 and 26,500 tU, down from the initial plan of 30,500-31,500 tU.
