ASTANA, Kazakhstan, January 20. Fitch Ratings has upgraded Kazatomprom's (Kazakhstan's National Atomic Company) Long-Term Issuer Default Rating (IDR) to 'BBB' from 'BBB-' with a stable outlook, Trend reports.
The upgrade reflects increased scale with EBITDA of around USD1 billion based on Fitch's assumption of mid-cycle uranium prices of USD40 per pound (lb) of natural uranium and the company's proven adherence to a conservative financial policy. Fitch forecasts EBITDA gross leverage to remain below 1.0x over 2023-2026, supported by its first quartile position in the global cost curve, production expansion and suitable fundamentals for uranium demand.
The rating further reflects Kazatomprom's position as a global leader in uranium production, contracted production volumes and long-term relationships with utilities with stable profiles as key customers.
However, the ratings are constrained by its limited diversification both as a single commodity producer in a niche market and geographically and exposure to uranium price volatility.
Fitch rates the company on a standalone basis as it views the ties with Kazakhstan (BBB/Stable), its ultimate owner with a 75% shareholding, as limited under Fitch's Government-Related Entities (GRE) Rating Criteria.
Meanwhile, Kazakhstan ranks second in the world in terms of proven natural uranium reserves. The depths of the Republic of Kazakhstan contain around 14 percent of all proven world reserves. The entire proven reserves of uranium in the country are expected to be more than 700,000 tons.
Kazakhstan surpassed the United States in uranium production in 2009 and continues to dominate the global market.
Kazakhstan accounts for almost 40 percent of global uranium output. The volume of uranium production in 2021 was 21,800 tons, while the volume in 2022 was 21,300 tons.