BAKU, Azerbaijan, August 2
By Nargiz Sadikhova - Trend:
All 2021 guidance of Kazakhstan’s Kazatomprom National Atomic Company remains unchanged at this time, Trend reports citing the company.
The company expects that the production volume will be 22,500-22,800 tons of uranium in 2021. The sales will be 15,500-16,000 tons and the revenue will be 620-640 billion tenge ($1.44-$1.49 billion).
Revenue, C1 cash cost (attributable basis) and All-in Sustaining cash cost (attributable C1 + capital cost) may vary from the ranges shown, to the extent that the KZT-to-USD exchange rate and uranium spot price differ from the assumptions shown in the footnotes.
Kazatomprom’s efforts to prevent the spread of COVID-19 and protect the health and well-being of employees and local communities has been successful in maintaining continuity of operations and production capacity thus far in 2021.
However, in 2020, the introduction of a state of emergency in the Republic of Kazakhstan and the Company’s four-month suspension of certain activities at its operations, impacted exploration and development activities, which led to a shift in the commissioning schedule for new well fields.
As a result of the shift, uranium production volumes through the first-half of 2021 fell short of internal expectations.
As previously noted, in addition to the delayed exploration and development work, COVID-19 disrupted the overall production supply chain, resulting in a shortage of certain production materials, such as piping, which also had a negative impact on first-half production results.
Despite these challenges, the Group is maintaining its 2021 production plan and making every effort to achieve it, though final year-end volumes may fall short if the wellfield development and supply chain issues continue throughout the second-half of the year.
The company only intends to update annual guidance in relation to operational factors and internal changes that are within its control. Key assumptions used for external metrics, such as exchange rates and uranium prices, are established using third party sources during the Company’s annual budget process; such assumptions will only be updated on an interim basis in exceptional circumstances.
The company continues to target an ongoing inventory level of approximately six to seven months of annual attributable production. However, inventory could fall below these levels in 2021 and 2022, due to COVID related production losses. As such, during the second quarter, several transactions to purchase material in the spot market were carried out and the Company will continue to monitor market conditions for opportunities to optimize its inventory levels.
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