World’s largest uranium miner warns Ukraine war makes it harder to supply west

Kazatomprom’s chief executive has warned that Russia’s war on Ukraine is making it harder for the world’s largest uranium producer to keep supplying the west as the gravitational pull towards Moscow and Beijing grows stronger.

Meirzhan Yussupov, chief of the Kazakh state miner, said that sanctions caused by the war had created obstacles to supplying western utilities.

“It is much easier for us to sell most, if not all, of our production to our Asian partners — I wouldn’t call [out] the specific country . . . They can eat up almost all of our production, or our partners to the north,” he told the FT.

He added however: “It’s much easier to sell to them but we don’t want to put all our eggs in one basket.”

The Astana-based miner, of which the Kazakh state owns 75 per cent, wants to keep a diverse mix of customers that includes US and European utilities, even though shipping material on the traditional, cheaper route via St Petersburg is no longer an option because of sanctions risk.

Kazatomprom, which is listed in Astana and London, has sought to establish an alternative route to ship material through the Caspian Sea, Azerbaijan, Georgia and the Black Sea, at a higher cost.

Kazakhstan produces 43 per cent of the world’s uranium, equivalent to the market share that the Opec cartel has over oil. But the potential influence of Russia over its Central Asian neighbour has been an increasing source of concern for western utilities and industry partners.

“You will see some changes,” said Leigh Curyer, chief executive of NexGen Energy, which is developing a large uranium mining project in Canada. “Perhaps their production will increase to servicing Russia and China. If that’s the case, western world utilities will look to western world suppliers . . . I think we’re already seeing signs of that.”

Rosatom, Russia’s nuclear monopoly, holds a stake in five of Kazatomprom’s 14 deposits. Under those arrangements, it receives 20 per cent of the country’s output, said Yussupov.

Adding to the challenge is that Russia and China are leading the construction of new nuclear plants globally.

In 2022, the company disclosed in a footnote in its annual report that the ownership of the company holding a 49 per cent stake in Budenovskoye, a giant deposit that Kazatomprom is developing, was transferred to entities including Rosatom’s subsidiary Uranium One. The lack of transparency over the disposal caused concerns internally, according to one person with direct knowledge of the matter.

A dozen senior Kazatomprom executives have left over the past two years, according to disclosures. Kazatomprom denied that the exodus was partly related to the stake sale.

“There is not that big a concern” about Rosatom’s level of involvement, citing lower levels of interdependence between the two countries compared with the oil and gas sector, Yussupov said.

But he also added: “There is, of course, concern”.

The chief’s comments came after the company last month downgraded its output forecast for 2025 by 17 per cent and suspended its 2026 guidance. It cited shortages of sulphuric acid, essential to extract uranium, and construction delays for surface facilities and infrastructure.

Kazatomprom sent 49 per cent of uranium under its control to the Asian market, 32 per cent to Europe and 19 per cent to the American market last year, according to its latest annual report.

“We are very serious about diversifying the geography of our sales,” Yussupov said.

Katie Mallinson, partner of Prism Political Risk Management, a business intelligence company, said that Kazakhstan had been under increasing pressure from Russia and China to restrict its interaction with western nations, particularly since US troops left Afghanistan in 2021.

“This is particularly the case for uranium, where it has a pivotal role in the global supply chain,” she said.

“Russia has increased its stake in Kazakhstan’s production of uranium and Kazakhstan has been committing more and more of its supply to the Chinese market. This is leaving serious questions in the long term as to how much uranium will be available on western markets.”