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Kazatomprom cuts prompt spot movement

The world’s largest uranium producer Kazakhstan-based Kazatomprom says it expects to produce about 4,000 tonnes or 17.5% less product this year, as measures designed to curb the spread of COVID-19 impact all operations.
Kazatomprom cuts prompt spot movement Kazatomprom cuts prompt spot movement Kazatomprom cuts prompt spot movement Kazatomprom cuts prompt spot movement Kazatomprom cuts prompt spot movement

Kazatomprom has reduced its 2020 production guidance by 17.5% because of COVID-19-related impacts

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The previous guidance for 2020 was 22,750-22,800t, on a 100% basis.

The reduced production level should not impact Kazatomprom's 2020 sales obligations, CEO Galymzhan Pirmatov said, noting its full contractual requirements to the nuclear industry would still be met.

"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," he said.

In order to abide by local lockdown requirements and reduce the risk of a localised outbreak, all Kazatomprom'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 physical 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," said Pirmatov.

Kazotomprom guided for the enhanced safety measures to be in place for at least three months during which wellfield activity will be lower.

Kazatomprom would provide updated 2020 guidance for attributable production, revenue, capital expenditure and costs on May 4. In 2019, Kazakhstan accounted for more than 42% of the world's uranium output.

Canadian uranium major Cameco said Tuesday the Kazatomprom cuts would also weigh on its 40% ownership in the Inkai Joint Venture, an in-situ recovery uranium mine in Kazakhstan. The mine is expected to produce about 12% fewer pounds this year, translating to about 600,000lb less uranium oxide for Cameco's account.

Before the curtailments, Cameco had expected to buy 4.9Mlb of uranium on the spot market this year.

Cameco said last month it was suspending mining and milling at the Cigar Lake and McClean Lake operations, in Saskatchewan.

CNNC Rössing Uranium has also suspended normal mining operations at the Rössing uranium mine in Namibia, while Swakop Uranium is curtailing production from the Husab mine in the country from March 28 in response to a state of emergency imposed by the local government.

The immediately tighter global uranium supply prompted spot price offers in the US$29.50-$30.00/lb range on Tuesday, according to data provided by Uranium Energy Corp, higher than the sub-$27.00/lb level seen in the year to date.

According to the company, up to 53% or 6.3Mlb/m of the global uranium supply is currently curtailed, framed against total global production of 11.85Mlb.


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