BAKU, Azerbaijan, August 27
By Nargiz Sadikhova - Trend:
All 2021 production plan of Kazakhstan’s Kazatomprom National Company remains fundamentally unchanged at this time, Trend reports citing the company.
This is except for adjustments in the attributable share of U3O8 production and All-in sustaining cash cost (AISC) to account for the sale of a 49% share in “Ortalyk” LLP to CGNM UK Limited (CGNPC subsidiary) in July 2021. 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 have 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 wellfields.
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 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 shortfall.
As such, during the second quarter, several transactions to purchase material in the spot market were carried out, and the Company may buy additional material in the spot market during the second half of the year in order to keep its inventories within the targeted range and to meet sales commitments for the rest of 2021.
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).
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