Kazatomprom to expand uranium exploration in southern Kazakhstan

Kazatomprom, which is controlled by Samruk-Kazyna, has obtained the uranium exploration rights for a new section of the Budenovskoye deposit in southern Kazakhstan, the company reported.

«National Atomic Company Kazatomprom JSC announces that it has obtained the subsoil use license for uranium exploration at block 5 of Budenovskoye deposit, located in the Suzak district of Turkestan region, for a period of 6 years,» the company said in a statement.

The Budenovskoye deposit is part of the Mynkuduk ore district within the Kentse-Budennovskoye metallogenic zone and is connected to the southern side of the Inkai deposit. Block 5, located in the northeast of the southern flank of the deposit, has significant potential for further development. The uranium resources at this site are estimated to exceed 18,000 tons, indicating strong prospects for detailed exploration. Upon completion of exploration, the resources and reserves data will be updated, potentially leading to a significant increase in the identified resources. 

«The new block, Budenovskoye 5, holds promise for further development and is an important step of Kazatomprom’s strategy on replenishment of uranium resources. The presence of significant uranium resources, favorable geological conditions and developed infrastructure create unique opportunities for long-term operation. I am confident that this project will help strengthen Kazatomprom’s position as a global leader,” said Meirzhan Yussupov, CEO of Kazatomprom.

Further work on the site will focus on identifying resources and developing a production plan. These activities will support the successful implementation of the company’s long-term objectives and contribute to the growth of Kazakhstan’s uranium mining industry. Kazatomprom will continue its active exploration efforts to ensure long-term sustainable growth, foster development and enhance community well-being in uranium mining regions, all while creating long-term value for stakeholders.

Kazakhstan ranks second, after Australia, in terms of explored natural uranium reserves, accounting for about 14% of the world’s total. The country’s proven reserves are estimated at over 700,000 tons of uranium.

In 2009, Kazakhstan became the world’s largest uranium producer and has maintained its leading position, contributing approximately 40% of the global uranium output. The country mines uranium exclusively through in-situ leaching, which is considered the most environmentally safe and cost-effective method. The uranium mined in Kazakhstan is exported to China, France, Russia and Canada, among others.

In August, Kazatomprom announced a reduction in payments to the company’s executive body for 2023, decreasing to $1.5 million from $1.6 million in 2022, a 3.5% reduction, despite a 23% increase in net profit for 2023.

At the end of 2023, Kazatomprom’s consolidated revenue totaled $2.9 billion, a 43% increase compared to 2022. Operating profit amounted to $1.4 billion, up 49% and net income reached $1.2 billion, a 23% increase. The company’s assets grew to $5.4 billion at the end of 2023, up from $4.5 billion a year earlier.

In the first six months of 2024, Kazatomprom and its subsidiaries reduced sales of uranium oxide by 18% year-on-year (YoY), from 9,500 to 7,800 tons. Meanwhile, production volume increased by 6% YoY to 10,800 tons.

In the second quarter of 2024, the average sales price for the group and Kazatomprom’s transactions rose by 44% to $68.33 and $65.96 per pound of uranium oxide, respectively. For the first and second quarters combined, these prices increased by 41% ($66.22) and 34% ($62.5). At the same time, average spot prices increased by 61% to $87.88 in April-June and by 73% to $91.10 in January-June.

Last September, Kazatomprom reported an increase in its uranium production plans for 2025. The company said it would extract the resource in full, in accordance with previously signed subsoil use contracts, after initially planning to limit output to 90%. This adjustment amounted to an increase of 5,500-6,500 tons. The company explained the plan change by citing a “strong portfolio of contracts and growing sales volume.»

However, in January, Kazatomprom announced that it might reduce its output in 2024 due to difficulties in purchasing sulfuric acid, a key component in uranium mining. Despite this, the company assured its buyers it would fully meet the supply obligations under existing contracts.

As of July 1, 2024, 75% of Kazatomprom’s shares were owned by Samruk-Kazyna, with Citibank as the nominal holder of 24.34% of the shares and the remaining 0.66% belonging to minority shareholders. The company’s securities are listed on the London Stock Exchange (LSE), Astana International Exchange (AIX) and the Almaty-based Kazakhstan Stock Exchange (KASE). During the initial public offering in late 2018, one Global Depositary Receipt (GDR) of the company was priced at $11.60 on the London Stock Exchange, while its shares traded at $9.08 each on the Astana International Financial Centre (AIFC) exchange