JSC National Atomic Company “Kazatomprom” (“Kazatomprom” or “the Company”) announces the following update related to the impact of the COVID-19 outbreak on the Company’s business.
“As the impact of COVID-19 continues to be felt around the world, Kazakhstan has taken strong steps to slow the spread of the virus,” said Galymzhan Pirmatov, chief executive officer of Kazatomprom. “Measures imposed by the government of Kazakhstan, including restrictions on the movement of people and strict hygiene directives, are now covering all regions where Kazatomprom operates and have been enforced at all of our sites and offices. Our thoughts and thanks are with everyone who is helping to combat this global pandemic, especially healthcare workers, law enforcement services and state authorities.
“Amid current conditions, Kazatomprom’s first priority is the health and wellbeing of our staff and their families, our partners, and the communities where we operate. In order to abide by local lock down requirements and reduce the risk of a localized outbreak, all of the Company’s subsidiaries are reducing the number of staff on site to minimum possible levels. All non-essential staff will return home with full pay, while those remaining on site will operate within strict social distancing and hygiene practices. We are now working with our joint venture partners on assessing the full impact and detailed implementation of this decision across all of Kazakhstan’s uranium mines, and we appreciate their support during these challenging times.”
These measures are expected to remain in place for three months, resulting in a lower level of wellfield development activity and, in consequence, a reduction in production volumes. Based on that assumption, the Company expects Kazakhstan’s 2020 annual uranium production volume to decrease by up to 4,000 tU from previous expectations (previously 22,750 tU to 22,800 tU on a 100% basis), although the precise impact on production may vary from this estimate.
The reduced production level is not expected to impact Kazatomprom’s 2020 sales obligations, underlining its strength as a reliable supplier to the nuclear industry. The Company has informed all of its customers that their full contractual requirements will be met.
The Company expects to provide updated 2020 guidance for attributable production, revenue, CAPEX, C1 cash costs, and All-in sustaining costs in its 1Q20 Operations and Trading update on 4 May 2020, following the completion of an updated macroeconomic assessment and the stabilization of the Tenge to US dollar exchange rate.
Kazatomprom remains financially stable with a strong, unlevered balance sheet and a commitment to its dividend policy, including the minimum US$200 million payment expected in 2020.
More than ever, this pandemic highlights the important role that nuclear power generation plays in providing a resilient and reliable source of clean, baseload electricity for maintaining key services around the world, including hospitals, transportation, telecommunication, and food storage, as well as the heating and lighting of homes.