Top uranium miner Kazatomprom ups production 16% in Q3, lowers 2021 guidance
(Kitco News) - Kazakhstan's Kazatomprom(LSE: KAP), the world's largest uranium producer, announced today that thecompany produced 2,928 tonnes of uranium (as U3O8) in Q3 2021 on anattributable basis, which is 16% more than in Q3 2020 (2,518 tonnes).
Overall, uranium productionin Kazakhstan (100% of KAP and its partners production) was 5,508 tonnes in Q32021, a 18% increase over Q3 2020 (4,657 tonnes).
"Production on both a 100%and attributable basis was higher for the first nine months of 2021 compared tothe same period in 2020, and notably higher for the third quarter compared tothe same period in 2020," the company said in a statement.
The pandemic-related safetymeasures that were implemented in 2020 impacted production volumes throughoutthe second half of that year - production in 2020 should therefore beconsidered exceptionally low, KAP added.
"Uranium sales at both theGroup and KAP levels decreased for both the third quarter and first nine monthsdue to the timing of customer requirements and differences in the timing ofdeliveries in 2020 and 2021," the company said.
Higher uranium prices in 2021had a positive impact on KAP's average realized price compared to 2020, whichincreased 4% to $31.68/lb U3O8 in Q3 2021.
If prices remain higher than 2020through to year-end, the trend of increasing average realized price is expectedto continue, with the company's delivery schedule weighted to the second halfof 2021, the company noted.
Importantly, Kazatomprom saidits 2021 production expectations have decreased due to delays in explorationand wellfield development activity.
"Pandemic-related supplychain issues have resulted in limited access to certain key operating materialsand equipment (production reagents, certain types of pipes and pumps, specializedequipment, drilling rigs), which has had a material impact on the company'sproduction schedule," KAP pointed out.
On a 100% basis, the companynow expects to produce between 21,700 - 22,000 (previously 22,500 - 22,800) andon an attributable basis, 11,800 - 12,000 (previously 12,100 - 12,400).
Expected annual sales at theGroup level has increased to between 16,300 - 16,800 (previously 15,500 -16,000) due to additional sales by consolidated subsidiaries to JV partners.
The company said it continuesto target an ongoing inventory level of approximately six to seven months ofannual attributable production. However, inventory could fall below theselevels in 2021 and 2022, due to COVID-related production losses.
As such, the company noted thatduring the third quarter, several transactions to purchase material in the spotmarket were carried out and that the company will continue to monitor marketconditions for opportunities to optimise its inventory levels.
Kazatomprom is the world'slargest producer of uranium, with the company's attributable productionrepresenting approximately 23% of global primary uranium production in 2020.
The Group benefits from thelargest reserve base in the industry and operates, through its subsidiaries,JVs and Associates, 26 deposits, located in Kazakhstan, grouped into 14 miningassets.
By Vladimir BasovFor Kitco News
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