JSC National Atomic Company “Kazatomprom” (“Kazatomprom” or “the Company”) announces today that it plans to maintain 2023 production at a similar level to 2022, which is expected to be 20% lower than the planned volumes under its Subsoil Use Contracts. The Company will now begin working with joint venture partners to assess the impact and implement the plan across all of Kazakhstan’s uranium mines.

“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,” said Galymzhan Pirmatov, Chief Executive Officer of Kazatomprom. “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 maximize returns for our shareholders.

“Kazatomprom’s low-cost, flexible assets place the Company in a class of its own, where despite remaining profitable even at the lowest point in the commodity cycle, the true value of our leading position in the sector has been limited by a market environment that is unfavourable to long-term contracting. With the establishment of our THK subsidiary in 2017, Kazatomprom has the opportunity to diversify its contract portfolio and gain better line-of-sight to future sales. Accordingly, the Company does not expect to return to full Subsoil Use Contract production levels until a sustained market recovery is evident, supply and demand conditions signal a need for more uranium, and the Company’s pipeline of mid- to long-term contract negotiations implies that there is a low risk of produced volumes further delaying the recovery.”

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 2022 capital expenditure budgets, accounting for the revised production levels in 2023. The Company will continue to monitor ongoing market developments and maintain the flexibility to react quickly to changing conditions. No decision has been taken regarding mine development activity and production beyond 2023.

The full implementation of this decision would remove up to 5,000 tU from anticipated global primary supply in 2023, with uranium production in Kazakhstan remaining similar to the level expected in 2022. Kazatomprom’s 2023 production is therefore expected to be between 22,500 and 23,000 tU (100% basis), a 20% reduction of the total expected Subsoil Use Contract level of about 27,500 - 28,000 tU.

Ortalyk Transaction Update

As previously announced, under the terms of several cooperation agreements between Kazatomprom and China General Nuclear Power Corporation (“CGNPC”), the parties agreed to construct a fuel assembly plant (“Ulba-FA”) at the Ulba Metallurgical Plant. CGNPC provided a guarantee that Ulba-FA’s production will be purchased by CGNPC, in exchange for Kazatomprom agreeing to sell  a 49% interest in the Company’s wholly owned subsidiary, Ortalyk LLP, to a subsidiary of CGNPC (the “Transaction”).  

In April 2021, a Sale and Purchase agreement was signed and the parties agreed to the valuation determined by one of the four major international advisory and professional services firms, whereby a 49% share of the operation was assessed a value of approximately USD 435 million.

The Transaction, subject to a number of conditions and governmental and legislative approvals, was expected to close by 30 June 2021. With the Counterparty’s agreement, the anticipated closure date has been extended to 31 July 2021.

Upon completing the Transaction, Kazatomprom will retain a controlling 51% interest and CGN Mining (a CGNPC subsidiary) will acquire a 49% interest in Ortalyk LLP, with each partner purchasing a proportionate share of uranium production from the operation according to interest.

For further information, please contact:

Kazatomprom Investor Relations Inquiries

Cory Kos, Head of Investor Relations

Tel: +7 7172 45 81 80

Email: irkazatomprom.kz

Kazatomprom Public Relations and Media Inquiries

Torgyn Mukayeva, Chief Expert, GR & PR

Tel: +7 7172 45 80 63

Email: prkazatomprom.kz

About Kazatomprom

Kazatomprom is the world's largest producer of uranium, with the Company’s attributable production representing approximately 23% of global primary uranium production in 2020. The Group benefits from the largest reserve base in the industry and operates, through its subsidiaries, JVs and Associates, 26 deposits grouped into 14 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 (ISO 45001 and ISO 14001 certified).

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 the Company website at http://www.kazatomprom.kz

Forward-looking statements

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