Russia’s Uranium One to increase share in global uranium market
Uranium One (U1), the uranium holding, operated by Russian nuclear monopoly Rosatom, plans to become one of the world’s leading uranium producers during the next several years, which is expected to be achieved through the reduction of costs and optimization of production.
The current situation in the global uranium market remains complex for producers, which is mainly due to low demand and overproduction, however, as part of the plans of U1, is the increase of its market share in the coming years.
Last year the volume of uranium production of U1 grew by 3.3%, to 4,790 tonnes, the majority of which accounts for the company’s uranium assets in Kazakhstan, which development is associated with the lowest production costs.
Vasily Konstantinov, head of Uranium One, said the company currently has the world’s lowest production costs and plans their further reduction this year, which should help U1 to significantly increase its share in the global market.
As part of these plans, the company is going to further increase the production in Kazakhstan with its simultaneous reduction at its uranium mines in Western countries, and in particular the US. The increase of Kazakh production will be mainly associated with the devaluation of the Kazakh national currency – tenge, which took place in the second half of 2015, and which made the Kazakh uranium production one of the world’s cheapest and attracted some global uranium majors.
In order to improve the efficiency of its crucial assets, the company decided to cut the consumption of electricity and reagents, as well as introduced new methods of development and production. In addition, the company decided to sell its inefficient assets, and in particular the Australian Honeymoon uranium mine, which development was suspended as far back as in 2013, and the portfolio of assets in the United States.
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Amid the low global prices for uranium, (which have fallen sharply in 2011 after the accident at Japanese Fukushima-1 and the subsequent closure of nuclear power plants in a number of countries), the cost of production in recent years has become one of the key factors of success for global uranium producers.
In 2015, there was a slight increase in spot uranium prices, which grew up to $36.8 per pound, compared to 2014. At the same time in the first months of the current year prices fell to US$28.7 and there is a possibility of their further decline in the coming months.
Uranium One has not ruled the increase of production by two times to 10,000 tonnes in the long term, that will mainly depend on further situation in the market. As part of the company’s plans is the launch of Mkuju River uranium mine in Tanzania. Mkuju River was acquired by Rosatom in 2010-2011 and at that period of time was considered as an extremely profitable asset for the company. However, due to the current low global uranium prices, the development of the asset has not yet been started.
In the case of Kazakhstan, the production should grow up to 5,500 tonnes by 2020
Eugene Gerden is an international free-lance writer, based in St. Petersburg, who specializes on writing in the field of mining, metals and rare earth metals. ... <Read more about Eugene Gerden>