Kazatomprom Celebrates 25 Years in Business: CEO Talks About Achievements and Efforts to Establish Nuclear Fuel Cycle Facilities

NUR-SULTAN – National atomic company Kazatomprom, the world’s largest uranium producer, is celebrating 25 years as the world leader in uranium mining and sales. To mark the date, Kazatomprom CEO Mazhit Sharipov spoke about the company’s main achievements, its efforts to establish nuclear fuel cycle production in Kazakhstan and develop an environmentally friendly energy complex in an interview. with The Astana Times.

Mazhit Sharipov, CEO of Kazatomprom

As the world leader in the production of primary uranium, Kazakhstan satisfies more than 45% of the world’s annual nuclear fuel needs, with a quarter of the world’s supplies coming directly from Kazatomprom. Last year, the company sold uranium products to 21 customers in eight countries.

This year, Kazatomprom celebrates its 25th anniversary. Tell us about the company’s achievements over this period and Kazatomprom’s strategy for the next few years.

Uranium reserves are a long-term asset of the country, the management of which has been entrusted to Kazatomprom. Over the years, the company has not only managed this asset but has continuously introduced new technologies and implemented projects to develop its business for the benefit of current and future generations.

While the objective of our strategy is to maintain the company’s leadership in uranium mining, we also strive to establish new nuclear fuel cycle production facilities in Kazakhstan over time, to produce more refined and valuable uranium products. This should allow the company to strengthen its position in the global nuclear market in the long term and expand its presence in the global nuclear fuel market.

We are now proud to say that Kazatomprom is the world leader in the extraction and sale of uranium, with the lowest cost of production and approximately 24% of total primary uranium production. The company ranks second in the world in terms of explored uranium reserves and develops 26 zones grouped into 14 uranium mining subsidiaries. The company is constantly expanding its markets for uranium and uranium products.

It is also important to highlight that since 2018 Kazatomprom shares have been traded on the Astana International Stock Exchange (AIX) and the London Stock Exchange (LSE), which means that everything we do follows strong trading practices. international governance and transparency. Samruk Kazyna Sovereign Wealth Fund has a majority stake holding 75% of the company’s outstanding shares, while 25% is free float and held by minority shareholders worldwide.

Last year the company launched a Kazakh-Chinese joint factory for the production of fuel assemblies, Ulba-FA. What does this project mean for the company and for the development of the nuclear industry in Kazakhstan?

The implementation of this project is an important historical event for the nuclear industry of Kazakhstan, which allowed Kazakhstan to enter a limited group of states producing and supplying nuclear fuel for nuclear power plants.

For Kazatomprom, this was an important step towards diversifying the nuclear fuel cycle products available to the company’s customers.

In addition, the implementation of an innovative project like Ulba-FA is an example of the company’s contribution to achieving the carbon neutrality objectives of the Paris Agreement.

The plant’s production capacity is around 200 tonnes of uranium in the form of fuel assemblies per year. Currently, the plant has started the production of fuel assemblies under the orders placed by China General Nuclear Power Corporation companies in China, and design capability is expected to be reached in 2024.

Since the beginning of 2022, President Kassym-Jomart Tokayev has undertaken a series of reforms, and some of them concern national mining companies. What are some of President Tokayev’s initiatives that Kazatomprom plans to implement?

Several reforms concerning Kazatomprom are being implemented as part of the company’s long-term strategy.

Reduce environmental impact

Firstly, in his speech at an extended government meeting in February, the President underlined the importance of developing the energy complex, namely the use of nuclear energy as a source of environmentally friendly electricity production. environment and profitable.

Although Kazatomprom is not directly responsible for nuclear energy, as the world’s largest producer and supplier of natural uranium, it plays an important role in global energy transition efforts. Minimizing and mitigating the impacts of our operations through responsible land and water management is a central part of our business strategy.

One hundred percent of the uranium produced in Kazakhstan is mined using in situ recovery (ISR), which, unlike underground or surface mining methods, has no negative effect on the surface : there is no subsidence and ground disturbance, and no surface storage of low-grade ores or waste rock.

Additionally, SRI does not require liquid waste or tailings management facilities.

I would also like to point out that since its inception, Kazatomprom has strictly adhered to the principles of safe, reliable and peaceful use of atomic energy, supplying mined uranium and uranium derivative products only if used for peaceful purposes.

Environmental, Social and Governance (ESG) Compliance

During the January meeting of the Mazhilis (a lower house of Parliament), the President also spoke of the need to develop an investment policy to improve the attractiveness of the country in terms of strengthening the requirements of ESG, global energy and technology transition.

In this regard, we have increased employee compensation expenses, actively supported the development and growth of the regions where the company operates, financed socially significant projects and contributed to improving the well-being of local communities. We also installed information panels for real-time radiation monitoring in nearby communities.

This year, the company plans to obtain an independent ESG rating and to develop medium and long-term ESG objectives with precise quantitative and qualitative objectives.

All these measures are taken to improve the efficiency of the company and to attract investors, who pay great attention to ESG factors in their decisions.

Reduction in unemployment

The president also focused on reducing unemployment, especially youth unemployment. Kazatomprom strives to develop and realize the intellectual, professional and creative potential of young specialists.

In 2021, the company launched the Izbasar program, which aims to train and develop talented young leaders with the prospect of step-by-step career development in Kazatomprom enterprises.

Four graduates of the program were hired after the first round of rotations. At the end of 2021, eight other young specialists were selected by competition and are currently doing a 15-month internship at Kazatomprom and its companies.

In total, more than 20,000 people are employed in the Kazatomprom group.

What is the company’s strategy in the context of geopolitical instability and sanctions imposed on Russia?

First of all, I would like to say that we have great sympathy for all the victims of the Russian-Ukrainian conflict and we hope that a peaceful resolution will come very soon.

As for the sanctions imposed by various countries against Russia, they have so far not directly affected the uranium and nuclear industry. That said, we are well aware that this could change at any time, and we are diligently reviewing mitigation plans.

Kazatomprom identified a number of risks associated with geopolitical instability. There is a risk of indirect and secondary sanctions against Kazatomprom due to operations where we have a Russian partner, risks related to exchange rate fluctuations, transportation of our products and disruption of supply chains.

For secondary sanction risk, we will take all necessary steps to ensure that the business is not exposed to potential negative impacts on our business.

In the field of transportation, we still ship our products using our existing main route, but I would like to point out that in 2018 we established and successfully used an alternative route that does not enter the Russian Federation. We would be willing to use it again if the situation changes and we encounter challenges.

And in addition to physical deliveries, the company has the ability to broker swaps with its partners and customers, where uranium that is already at or near a Western delivery point is “swapped” for Kazatomprom uranium. somewhere else, or for uranium to be delivered to them later.

The weakening of the tenge also does not have a significant impact on Kazatomprom’s financial situation at present, since the company earns its profits mainly in US dollars.

We continue to monitor the current situation and will take all necessary measures to minimize potential risks in order to prevent any potential negative impact on the Company’s activities and to protect the interests of all its stakeholders.

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