“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,” he said in a statement, outlining the group’s production plans.
“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 centres back to full capacity in 2022.”
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.
Total consolidated production is expected to be reduced by more than 20,000 tU, from its previous 2020-2022 production plans.
Kazatomprom also said that was not planning additional production to replace volumes lost in 2020, owing to measures taken to combat the Covid-19 pandemic.
“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,” Mr Primatov said.
He also said the company could not rule out the possibility of further production disruptions, owing to the coronavirus pandemic.