12 Dec (NucNet): The volume of uranium mined in Kazakhstan in the first 11 months of this year fell by 7% to 19,600 tonnes (tU), with declining inventories continuing to see a rally that has seen prices for the nuclear material increase by more than 20% in 2018.
Kazakhstan energy minister Kanat Bozumbayev was reported by Russian news agency Interfax as saying the decline in production by state-owned uranium miner Kazatomprom, which is responsible for 25% of global production, was due to oversupply.
Earlier this year Mr Bozumbayev said Kazakhstan planned to reduce uranium mining in 2018 by about 7.7% to 21,600 tU.
In 2017, 23,400 tU was mined in the country, a reduction of 17% over 2016, although this still made Kazakhstan the world’s leading producer of natural uranium.
The spot uranium price jumped to almost $30 a pound last week, up more than 20% since the start of the year. This compares to an all-time high of nearly $140 per pound in June 2007.
In a research note on Kazatomprom, BMO Capital Markets said the rally in uranium prices, which began in April this year amid production cutbacks in Kazakhstan and Canada, is set to continue as inventories decline for the first time in nearly a decade.
BMO predicts a gradual increase in the uranium price as inventories are reduced, with the possibility of it reaching $55 per pound in 2023.
BMO said “production discipline” from top miners will break the trend of rising global uranium inventories following the Fukushima-Daiichi accident in Japan in 2011 and prompt the first production deficit in more than a decade.
Not only has production in Kazakhstan declined, but Canada’s Cameco suspended production at its McArthur River operation in Saskatchewan a year ago, and in July the company announced an indefinite shutdown of the mine, which can produce more than 11,000 tonnes of U308 (yellowcake).
French nuclear giant Areva, rebranded as Orano this year, cut production more than a year ago. In August Paladin put its Langer Heinrich mine in Namibia on care and maintenance, although this week the Sydney-based miner said it is working on a possible restart of operations with vanadium as a by-product. Vanadium is trading at record highs and the only metal outperforming uranium.
BMO said Chinese nuclear plans are crucial to the uranium outlook, and Beijing is likely to recommit to long-term nuclear targets at the upcoming plenary session of the ruling communist party, where economic goals for the next five years are set.
China has 46 commercially operating nuclear reactors, 11 under construction and is officially aiming for 58 GW of installed nuclear capacity by 2020 – up from almost 36 GW today. Beyond 2020, the government has said it wants to double its nuclear fleet by 2030.
At the end of November, China National Uranium Corporation, a subsidiary of China National Nuclear Corporation, bought control of the Rossing uranium mine in Namibia. China is also behind the only sizeable uranium mine to come into production in the past few years, the Husab mine in Namibia.