Supply chain issues prompt Kazatomprom to adjust production plans

In August 2022, Kazatomprom said it planned to increase its 2024 uranium production to a 90% level relative to its subsoil use agreements - an increase of 2000-3000 tU above expected 2023 levels, which were 80% relative to subsoil use agreements. This decision was based primarily on mid- and long-term contracts signed with new and existing customers and would have been the highest production level relative to subsoil contracts since the company's 2017 decision to flex down production from 2018 in response to supply and demand considerations.

The company has continued to note that challenges related to global supply chains and limited availability of certain key operating materials and reagents would pose a risk to planned production increases.

With growing demand from agricultural and industrial enterprises and shortages on both domestic and foreign regional markets, preliminary agreements with suppliers resulted in the company securing lower than required volume of sulphuric acid for 2024, Kazatomprom said today. It is "actively pursuing" alternative supplies of the reagent, which is used as the oxidant in its in-situ leach uranium operations, but current projections indicate that achieving its planned production levels "may be challenging".

The exact impact is still being assessed, and will be detailed in Kazatomprom's next quarterly trading update which is due by 1 February. If the issues continue throughout this year, 2025 production plans may also be affected, it said.