Page 10 - bne magazine February 2024_20240206
P. 10

    10 I Companies & Markets bne February 2024
  Russia and China maintain grip on Kazakhstan’s uranium supply amid US and EU high reliance on it
bne IntelliNews
Concerns are rising in the West over energy security
as it appears Russia and China – but especially Russia – have been both cornering the U308 market. Russia also handles much of the world processing of uranium, an awkward reality amid US plans to sanction Russian uranium imports over the war in Ukraine. These concerns were the focus of a recent Financial Times article.
In the midst of this stands Kazakhstan - around 59mn pounds of U308, constituting 44% of the current global uranium production, is sourced from this Central Asian nation, the article noted. This alarm also concerns other countries of course, but Kazakhstan's remains a key weak spot in securing the energy security for Western countries. And although the EU has tinkered with the idea of relying on Kazakhstan to bypass Russia, the approach would be as effective as relying on Russia to bypass Russia.
Here is why: the autonomy of Kazakhstan's decisions on uranium production and the potential influence exerted by Moscow on it is under question, since Russia’s support of the current Kazakh president, Kassym-Jomart Tokayev stands as the main guarantee of his continued rule. This happens to be the case with multiple leaders in Central Asia, including the previous Kazakh president, Nursultan Nazarbayev. Russia’s unquestionable authority over this has been demonstrated during the January 2022 political unrest in Kazakhstan, where the Russia-led OECD’s support played a key role in signalling the Kazakh military to obey Tokayev.
Although the news of Tokayev’s refusal to recognise Russia- occupied territories in Ukraine have made the West hopeful that Kazakhstan is moving away from Russia’s backyard, the reality is that Kazakhstan is simply trying to evade secondary sanctions, while staying as close to Russia as possible.
Beyond the realm of politics, Kazakh-origin uranium, whether directly or indirectly, plays a crucial role in meeting the West’s energy needs, covering 40% of the United States' utility requirements and a substantial 44% for the European Union.
More critically, the state-run uranium operator Kazatomprom, which went public on the London Stock Exchange in 2019 and is 75%-state-owned, operates uranium mines in Kazakhstan independently and through joint ventures, has been indirectly under Russia’s and China’s influence since at least the late noughties. Leaked interrogation videos of Kazatomprom
www.bne.eu
ex-head Mukhtar Dzhakishev – who arrested and imprisoned in 2009 and released in 2020 – show that Dzhakishev believed (at the time of the interrogation) that his arrest had something to do with Dzhakishev’s decision-making repeatedly stepping on Russia’s foot.
Dzhakishev, who is known for having led Kazatomprom through a period of rapid growth in the early 2000s, noted
in the videos that prior to his arrest he was urging Japan
and China to grab joint controlling stakes in Uranium One,
a Canadian firm that, back then, had indirect control over several key uranium assets in Kazakhstan. After his arrest, the infamous Uranium One deal took place, which led to Russia taking hold of a controlling stake instead. This was just one case of Russia and China’s competition over Kazakh uranium.
Since then, Russia has been maintaining control of over 26% of Kazakh uranium deposits and holds rights to an additional 22% of annual production. Meanwhile, China National Uranium Corporation (CNUC) and its counterparts possess rights to almost 60% of future Kazakh production, with plans for a uranium trading hub in Xinjiang, just across the Kazakh border.
Moreover, even though Kazakhstan is the world’s biggest player in uranium supply, much of its milled uranium travels through Russian conversion plants before it is exported to global markets. The are currently only four main operational
Everyone is scrambling to secure non-Russian uranium for their nuclear power plants but Russia and China are buying up more resources to consolidate their hold on the business. / bne IntelliNews
 















































































   8   9   10   11   12