Uranium Week: Kazaks Announce 2023 Production Plans

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As the uranium spot price increases by 1.5% for the week, the world's largest producer and seller of uranium plans to keep 2023 production steady at 2022 levels.

-Kazatomprom plans to keep 2023 production steady
-Lotus Resources announces results from drilling program
-Uranium spot price climbs by 1.5% for the week

By Mark Woodruff

Kazakhstan uranium producer Kazatomprom plans to maintain 2023 uranium production at a similar level to 2022.

CEO of the world’s largest producer and seller of natural uranium, Galymzhan Pirmatov said "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."

“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 maximise returns for our shareholders."

The impact of Kazatomprom’s decision is to reduce uranium production by -5,000tU (approximately -13mlbs), roughly 10% of global production.

ASX-listed Lotus Resources ((LOT)) recently announced it will soon begin a drilling program, marking the first uranium exploration drilling program at the Kayelekera Uranium Project in Malawi in more than 15 years. 

The company also plans to advance a number of technical studies, including ore sorting test work and power assessments.

The company has again updated the market with results from the initial phase of the ore testing work, indicating uranium grades of the ore increased by up to 100%, when compared to the original feed sample.

This validates the company’s view that ore sorting has the potential to both increase the feed grade (annual production) and extend the life of mine through utilising low-grade ores as plant feed.

Uranium pricing during the week

TradeTech’s weekly Spot Price Indicator is US$32.70/lb, up US$0.50/lb from last week’s Indicator.

Uranium Pricing-During the month

TradeTech's monthly spot price rose US$1.00 to close out June at US$32.40/lb.

A total of 5.6mlbs U3O8 equivalent involving 35 transactions traded hands during June, with utilities, traders, producers and financial entities all participating as buyers, reports TradeTech.

The mix of buyers, along with the expectation of sellers for further price increases caused prices to rise over the course of the month. The expectations of sellers were raised due to anticipated additional buying from funds and financial entities in July.

The monthly uranium spot price indicator has increased nearly 9% so far in 2021.

The Exchange Value currently sits nearly 8% above the 2020 average Exchange Value of US$30.15/lb. The average Exchange Value for 2021 is US$30.28/lb.

TradeTech's mid-term price indicator for June 30 is US$32.40/lb, up US$0.90/lb from last month, while the long-term price indicator remains unchanged at US$35.00/lb.

In the term uranium market, eight transactions involving delivery of over 3mlbs U3O8 equivalent in the term delivery window were reported in June, reports TradeTech. 

Term uranium buyers included utilities, producers, and traders, which represents a departure from the norm, as utilities typically dominate as buyers in the term uranium sector.

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