Uranium & Fuel

Kazatomprom / Sovereign Wealth Fund Sells Stake In Kazakh State Uranium Miner

By David Dalton
4 June 2020

Sale is part of ambitious privatisation plan
Sovereign Wealth Fund Sells Stake In Kazakh State Uranium Miner
Kazakhstan’s sovereign wealth fund, Samruk Kazyna, said on Wednesday it had sold a 6.27% stake in Kazatomprom, the world’s top state-owned uranium miner, for $206m in a move that sought to take advantage of improved market sentiment.

The fund, created in 2008, said it sold the shares at $13 per global depositary receipt, a type of bank certificate that represents shares in a foreign company. The price represents a discount of about 6% to the market price. The fund said in a statement it still holds a 75% stake in Kazatomprom.

The sale, Samruk-Kaznya’s second since the uranium miner’s IPO, is part of an ambitious privatisation plan set by Kazakhstan aimed at shoring up finances.

According to analysts, the state has been targeting long-term ownership levels in line with the Organisation for Economic Cooperation and Development’s (OECD) recommendations of about 15%.

Kazatomprom recently cut its 2020 output estimates because of the coronavirus pandemic. It now expects to produce about 4,000 tonnes of uranium, or 17.5% less this year. Previous estimates were between 22,750 and 22,800 tonnes.

Last year, Kazakhstan accounted for more than 42% of the world’s uranium output.

Uranium prices have been on the rise since late March as investors worry about disruption to supply, which is divided between a handful of major companies.

Prices hit $34.25 per pound this week, about 38% higher than at the beginning of March. The last time uranium traded above $30 was in February 2016. During the year to date, prices have climbed almost 40%.

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