JSC National Atomic Company “Kazatomprom” (“Kazatomprom” or “the Company”) announced today its intention to continue flexing down production by 20% through 2022, compared to the planned levels under Subsoil Use Contracts. The Company is also maintaining its 20% reduction against Subsoil Use Contracts in 2021, with no additional production planned to replace volumes lost in 2020, which was due to the measures taken to combat COVID-19. Kazatomprom will now begin working with joint venture partners to assess the impact and implement the plan across all of Kazakhstan’s uranium mines.
“The decision to keep production similar year-over-year, and extend production curtailment into 2022, is indicative of a global uranium market that is still recovering from a long period of oversupply,” said Galymzhan Pirmatov, Chief Executive Officer of Kazatomprom. “We are simply not seeing the market signals and fundamental support needed to ramp up mine development in 2021 and take our low-cost, tier one production centers back to full capacity in 2022.
“The market uncertainty attributed to the COVID-19 pandemic is significant, but despite the anticipated supply deficit in 2020, uranium prices and long-term contracting activity, while higher than in 2019, remain unsustainably low. Consequently, in line with our market-centric strategy, we intend to continue with the level of spending and operational activity commensurate with a 20% reduction to Subsoil Use Contract levels that we have maintained since 2018. We cannot rule out the possibility of further production disruptions due to COVID-19, given that the measures necessary to ensure the health and safety of our staff will continue to be our first priority.”
As was the case in previous years, the Company is announcing the plan well ahead of time to ensure its mining subsidiaries and joint ventures will be able to incorporate the required changes into their 2021 capital expenditure budgets, accounting for the revised production levels in 2022. No decision has been taken regarding mine development activity beyond 2022 and the Company continues to monitor market conditions. Kazatomprom does not expect to return to full Subsoil Use Contract production levels until a sustained market recovery is evident, and demand and supply conditions signal a need for more uranium.
The full implementation of this decision would remove up to 5,500 tU from anticipated global primary supply in 2022, with uranium production in Kazakhstan staying similar to the level expected in 2021. Kazatomprom’s 2022 production is therefore expected to be from 22,000 to 22,500 tU (100% basis), a 20% reduction of the total expected Subsoil Use Contract level of about 27,500 - 28,000 tU, as reflected in previous reports (Competent Persons’ Report, IPO Prospectus 31 October 2018). With the Company’s commitment to ESG and its market-centric strategy, Kazatomprom’s total consolidated uranium production is expected to be reduced by over 20,000 tU (100% basis) from its previous 2020 through 2022 production plans under Subsoil Use Contracts.
Conference Call Reminder - 2020 Half-Year Operating and Financial Review (27 August 2020)
Kazatomprom has scheduled an English language conference call to discuss 2020 half-year operating and financial results, after they are released on Thursday, 27 August 2020. The call will begin at 17:00 (AST) / 12:00 (BST) / 07:00 (EST). Following Management remarks, an interactive English Q&A session will be held with investors.
Interested parties are invited to join the live Q&A session using the following dial-in details:
- Kazakhstan (listen-only): +7 (8) 717 245 88 12, enter PIN 3715# when prompted
- UK Participant Toll-Free Dial-In Number: +44 (0) 80 0028 8438
- UK Participant Local Dial-In Number: + 44 (0) 20 3107 0289
- US Participant International US-Toll Dial-In Number: +1 (918) 922-6506
- Russia Participant Toll-Free Dial-In Number: +7 (833) 922-1411
To participate in live Q&A, provide the conference ID number 2950189 when prompted.
A live webcast of the conference call will be available from a link at www.kazatomprom.kz home page on the day of the call. Participants can also ask questions using the webcast question feature.
A recording of the webcast will also be available at www.kazatomprom.kz shortly after the event, along with a Russian language transcript.
For further information, please contact:
Kazatomprom Investor Relations Inquiries
Cory Kos, Director of Investor and Public Relations
Tel: +7 (8) 7172 45 81 80
Kazatomprom Public Relations and Media Inquiries
Torgyn Mukayeva, Deputy Director of Investor and Public Relations
Tel: +7 (8) 7172 45 80 63
Kazatomprom is the world's largest producer of uranium, with the company’s attributable production representing approximately 24% of global primary uranium production in 2019. The Group benefits from the largest reserve base in the industry and operates, through its subsidiaries, JVs and Associates, 24 deposits grouped into 13 mining assets. All of the Company’s mining operations are located in Kazakhstan and mined using ISR technology with a focus on maintaining industry-leading health, safety and environment standards.
Kazatomprom securities are listed on the London Stock Exchange and Astana International Exchange. As the national atomic company in the Republic of Kazakhstan, the Group's primary customers are operators of nuclear generation capacity, and the principal export markets for the Group's products are China, South and Eastern Asia, Europe and North America. The Group sells uranium and uranium products under long-term contracts, short-term contracts, as well as in the spot market, directly from its headquarters in Nur-Sultan, Kazakhstan, and through its Switzerland-based trading subsidiary, Trade House KazakAtom AG (THK).For more information, please see our newly updated website at http://www.kazatomprom.kz
All statements other than statements of historical fact included in this communication or document are forward-looking statements. Forward-looking statements give the Company’s current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. These statements may include, without limitation, any statements preceded by, followed by or including words such as “target,” “believe,” “expect,” “aim,” “intend,” “may,” “anticipate,” “estimate,” “plan,” “project,” “will,” “can have,” “likely,” “should,” “would,” “could” and other words and terms of similar meaning or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the Company’s actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which it will operate in the future. THE INFORMATION WITH RESPECT TO ANY PROJECTIONS PRESENTED HEREIN IS BASED ON A NUMBER OF ASSUMPTIONS ABOUT FUTURE EVENTS AND IS SUBJECT TO SIGNIFICANT ECONOMIC AND COMPETITIVE UNCERTAINTY AND OTHER CONTINGENCIES, NONE OF WHICH CAN BE PREDICTED WITH ANY CERTAINTY AND SOME OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY. THERE CAN BE NO ASSURANCES THAT THE PROJECTIONS WILL BE REALISED, AND ACTUAL RESULTS MAY BE HIGHER OR LOWER THAN THOSE INDICATED. NONE OF THE COMPANY NOR ITS SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, ADVISORS OR AFFILIATES, OR ANY REPRESENTATIVES OR AFFILIATES OF THE FOREGOING, ASSUMES RESPONSIBILITY FOR THE ACCURACY OF THE PROJECTIONS PRESENTED HEREIN. The information contained in this communication or document, including but not limited to forward-looking statements, applies only as of the date hereof and is not intended to give any assurances as to future results. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to such information, including any financial data or forward-looking statements, and will not publicly release any revisions it may make to the Information that may result from any change in the Company’s expectations, any change in events, conditions or circumstances on which these forward-looking statements are based, or other events or circumstances arising after the date hereof.