Supply Challenges Could Impact Uranium Production in Kazakhstan

NAC Kazatomprom, the world's largest producer of uranium, has expressed concerns about potential difficulties in obtaining sufficient sulfuric acid, a key material used in the extraction of the heavy metal. As a result, the company anticipates that its production for 2024 may be hindered. Delays in completing construction works at newly developed deposits have also added to the challenges, making it uncertain whether the target of achieving 90% of permitted production volume will be met.

These supply constraints could further impact Kazatomprom's production plan for 2025 if they persist throughout the year and if the company fails to catch up with the construction works schedule. Uranium prices have surged by over 100% in the past 12 months, reaching $97.45 per pound. The metal has emerged as a sought-after solution for addressing both decarbonization and energy security concerns.

Sulfuric acid remains the preferred method for extracting uranium from raw ore due to its cost-effectiveness and efficiency across various types of uranium ores. However, the exact extent of the impact on Kazatomprom's operational performance is currently being assessed and will be elaborated upon in the forthcoming production guidance for 2024. This trading update is scheduled for release no later than February 1.

As of 0946 GMT, shares in Kazatomprom have risen by 1.9% to reach 3,527.33 pence.