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Kazakhstan's Kazatomprom expects noticeable impact on production due to COVID-19

Business Materials 27 August 2020 16:15 (UTC +04:00)
Kazakhstan's Kazatomprom expects noticeable impact on production due to COVID-19

BAKU, Azerbaijan, Aug. 27

By Nargiz Sadikhova - Trend:

Kazakhstan’s Kazatomprom National Atomic Company expects to see a noticeable year-over-year COVID-19 impact on the company’s second-half production volumes, Trend reports with reference to the company.

“The theme of uncertainty in the uranium market persisted through the first half of 2020. However, the general sense is that there has been a shift in sentiment – from participants wondering ‘when’ the market will transition to support current and future primary production, to now talking of ‘how soon’ that transition could take place," said Galymzhan Pirmatov, Kazatomprom’s Chief Executive Officer.

Pirmatov said that uranium spot price rose in response to the initial announcements of COVID-related supply impacts at the beginning of the second quarter, with intermediaries buying in anticipation of a potential supply deficit, and some producers entering the spot market to replace lost production.

“Until just recently, there has been very little contracting activity by end-user utilities, who have been far more focused on managing their nuclear plants through the pandemic. The absence of those end-users and any serious term contracting, tells us that we have not yet reached a turning point, though the potential pressure on supply for the second half of the year is starting to gain attention,” he said.

In his words regardless of what is happening in the market, first and foremost, the company’s priority throughout these difficult past few months has been to ensure support to employees and to keep them safe and healthy, along with their families and local communities.

“We have spent a great deal of time developing business continuity plans and with those plans in mind, along with the close monitoring of local restrictions, recommendations, and medical system capacities, we began gradually returning staff to sites at the beginning of August. As of today, we have resumed both exploration drilling and mine wellfield development work,” he said.

Pirmatov also noted forecasts for 2020 results in the context of COVID-19

“As we previously advised, when we decreased staff on our sites and all drilling work stopped for four months, it meant that there was going to be a delay in new planned mining blocks coming online, so while there was little impact on the first-half production results, we expect to see a noticeable year-over-year impact on our second-half production volumes, and for the year,” he said.

“In the second half of 2020, we will remain steadfast with our strategic focus by maintaining our market discipline in our core business of uranium mining, with continued expansion into new markets with new customers, alongside an unwavering prioritization of ESG and the health and safety of our employees,” he noted.

Kazatomprom is the world's largest producer of uranium, with the company’s attributable production representing approximately 23 percent of global primary uranium production in 2018.

The company benefits from the largest reserve base in the industry and operates, through its subsidiaries, JVs and Associates, 26 deposits grouped into 13 mining assets. All of the company’s mining operations are located in Kazakhstan.

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