World's largest uranium miner adds fire to its looming deficit
(Kitco News) - In a statement released today, Kazakhstan's Kazatomprom, the world's largest uranium producer, said it plans to maintain 2023 uranium production at a similar level to 2022, which would remove up to 5,000 tU from anticipated global primary supply.
Kazatomprom's 2023 production is now expected to be between 22,500 and 23,000 tU (100% basis), a 20% reduction of the total expected subsoil use contract level of about 27,500 - 28,000 tU. No decision has been taken regarding mine development activity and production beyond 2023, the company noted.
"Consistent with our market-centric strategy, we intend to continue exercising commercial discipline, which will result in 2023 production remaining 20% lower than previously planned subsoil use contracts levels, keeping production essentially flat in 2022 and 2023," said CEO Galymzhan Pirmatov.
"Although the uranium market is starting to show signs of improvement, including an increase in long-term contracting interest, a thinning spot market, and slightly improved pricing, we still find ourselves in a position where adding tonnes back into the market in 2023 would be unlikely to maximize returns for our shareholders," added Pirmatov.
Kazatomprom said it does not expect to return to full subsoil use contract production levels until a sustained market recovery is evident, supply and demand conditions signal a need for more uranium, and the company's pipeline of mid- to long-term contract negotiations implies that there is a low risk of produced volumes further delaying the recovery.
Experts believe that the uranium market will be in a relatively large structural deficit position for the foreseeable future. Consulting firm UxC estimates that cumulative uncovered requirements are about 1.4 billion pounds of U3O8 (~538 thousand tonnes of uranium) to the end of 2035.