Following our recent site visit to Kazakhstan, we publish initiation research on world leading uranium producer National Atomic Company Kazatomprom (“Kazatomprom”). On a 100% basis, operations run by Kazatomprom produced ~40% (55Mlbs U3O8 equivalent) of global uranium production in 2023. The Company relies exclusively on in-situ recovery style mining across its 14 operations and dominates the lower half the global production-cost curve. Kazatomprom is currently preaching a strategy of “Value over Volume” and has tapered production expectations for FY25 (25,000-26,500 tU / ~65-69Mlbs U3O8 equivalent) citing the availability and cost of acid as an issue. We expect growth in production will be muted in future years. However, the group is expected to produce sufficient product to fill existing contract requirements, although perhaps not a significant surplus. By doing so, Kazatomprom passively contributes to tightness in the spot market, encouraging a stronger uranium price, ultimately benefitting Kazatomprom’s relative profitability whilst also lowering rate of Reserve depletion.
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