Listing in London is an “obvious choice”, senior executives from Kazatomprom, the world’s largest uranium producer, have said.
Galymzhan Pirmatov, chief executive of the company which produces a fifth of the world’s uranium, told City A.M. it is pursuing a mid-November double listing in London and Kazakh capital Astana.
He added: “To us London was an obvious choice to attract the international investor base we are looking for.”
Kazatomprom, which declined to reveal its valuation target, is the first major public offering of a privatisation drive started by Kazakh president Nursultan Nazarbayev in 2015.
The company’s owner, sovereign wealth fund Samruk-Kazyna, will sell up to 25 per cent of Kazatomprom when it comes to market.
“We believe this is a good time from our perspective as well. We are the largest uranium producer in the world and confident in the long-term prospects of uranium,” Pirmatov said.
The CEO said he is not concerned about an escalating global trade war as Kazakhstan is a close ally of the United States.
“Less than 10 per cent of our production is sold to the US, so we don’t see much risk to our standing from there,” he said.
The listing follows an upswing in the price of uranium.
After the 2011 Fukushima disaster in Japan, several years of high supply and poor demand caused prices to drop to a low of around $18 per lbs.
Miners responded by reducing output, with Kazatomprom cutting capacity by 20 per cent, driving prices back up to around $27 per lbs today.
Michael Stoner, a sector analyst at Berenberg told City A.M: “In a rising price environment companies are starting to do a little more with their assets. We think that by 2030 we will need another 45m lbs of supply to balance the market, and prices need to rise to around $50 per lbs to incentivise that.”
He added: “London already has Kazakh and other businesses from across the region. Many major oil businesses are listed here and operate in Kazakhstan, so firms from the region gravitate towards London.”
Source: City A.M.