Kazakhstan, the world’s leading uranium producer, and China, the prospective global leader in nuclear-based power generation, are looking to benefit from mutual energy cooperation in the foreseeable future.
Air quality, especially in major industrial agglomerates, along with strong dependence on oil, and rapidly growing electricity consumption remain China’s formidable energy challenges. However, for the last decade, a new tendency which is to gradually transform the Chinese energy pie, has been emerging – development of nuclear industry.
Describing overall situation at the International Petroleum Week conference in London last week, IEA Executive Director Fatih Birol indicated the fact that “today there are about 60 nuclear power plants [in the world] under construction and more than one third of them are in China.”
He also said that China might soon overtake the US and EU in nuclear power production.
At the same time, WNA (World Nuclear Association) has calculated three scenarios for the development of nuclear-based energy generation within the period up to 2035. Even with the worst forecast, power generation at nuclear power plants globally will continue to grow.
Kazakhstan has 12 percent of the world’s uranium resources. Some 50 uranium deposits are known, in six uranium provinces. So far 17 uranium projects have been developed in the country.
In 2009 Kazakhstan became the world’s leading uranium producer, with almost 28% of world production, then 33% in 2010, rising up to 41% in 2014, and 39% in 2015 and 2016, according to WNA.
Kazakhstan exports all the extracted uranium, mainly under long-term contracts, as the country does not own its own nuclear power plants. China remains the main importer of Kazakh uranium, the share of which is usually at least 52-53 percent from the total Kazakh export.
There are two major contracts between the countries: A long-term natural uranium purchase and sale contract signed in November 2010 between “Kazatomprom” and the Chinese CGNPC Uranium Resources for the period from 2011 to 2025; and a long-term natural uranium purchase and sale contract signed in December 2010 between “Kazatomprom” and the Chinese CNLIC for the period from 2011 to 2020.
Kazakhstan’s total production in 2016 was about 24.6 thousand tU, from which 13.2 thousand tU costing $823 million was exported to China (according to Kazstat data).
In 2017 Kazakhstan produced 23.4 thousand tU. The 2018 forecasted production is 23121 tU, according to data from the Ministry of Energy.
The decrease is due to the relatively weak global market conditions associated with an overabundance of uranium supply (post-Fukushima effect).
Energy Minister of Kazakhstan Kanat Bozumbayev believes that the excess of uranium in global market will remain until 2020, resulting in high volatility of prices and imbalance of supply and demand.
In late 2017 “Kazatomprom” announced its intention to reduce by 20 percent the uranium production planned under the mining contracts, in order to bring its production level in line with demand. The cuts will be in effect for three years, beginning from January 2018.
China is and will likely remain a guaranteed sales market for Kazakhstan. In 2017 Kazakhstan exported more than 12 thousand tU to China.
When, after a couple of years, a number of new Chinese nuclear power plants become operational, Kazakhstan will be able to exploit the favorable circumstances and expand again the uranium production ensuring its competitive advantage in comparison with many other countries.
Source: Trend News Agency