Kazakhstan produces more than 40% of the world’s uranium, and the unrest in the country has caused the price of radioactive metals to soar.
Kazakhstan, the world’s largest producer of radioactive metals, is struggling to deal with deadly protests, which is the biggest challenge to the country’s leadership in decades, with rising uranium prices.
This Central Asian country is part of the former Soviet Union and produces more than 40% of the world’s uranium. In order to calm the unrest, it has disrupted communication networks and restricted some travel. The Kremlin stated that after Kazakhstan President Tokayev called for assistance, Russia and its allies in the Collective Security Treaty Organization will send “peacekeeping forces.”
According to UxC data, the price of uranium on Wednesday soared by nearly 8% from USD 42 on Tuesday to USD 45.25 per pound. The turbulence may lead to greater reliance on suppliers outside of Kazakhstan, leading to soaring share prices of North American and Australian uranium companies.
Considering Kazakhstan’s role as the world’s largest supplier of uranium, “it’s like Saudi Arabia’s problems with oil,” said Jonathan Hinze, president of UxC LLC, a leading nuclear fuel market research and analysis company. “Even if there is no shortage, the possibility of a shortage is what people are trading now.”
Nuclear fuel made an amazing comeback in September, with prices soaring 24%, setting its best monthly performance since the end of 2008. Investors are betting that nuclear power will revive as the government abandons the use of fossil fuels.
Although prices rose due to news of unrest in Kazakhstan and potential supply disruptions, there was no immediate uranium shortage or nuclear power plant shutdown. Unlike facilities that use oil or natural gas, nuclear power plants can continue to operate even if shipments are delayed, because many nuclear power plants have accumulated large stocks in the past few years.
At least some mining operations are still continuing. An Orano spokesperson stated that Katco is a uranium mining joint venture between NAC Kazatomprom JSC and France’s Orano SA, and it has not been suspended at this stage because the mine is far away from the tense area.
Despite this, the share price of Kazatomprom, Kazakhstan’s largest uranium miner, has fallen 10% in London in the past two days. After the European Union pushed for plans to mark certain nuclear projects as sustainable, most uranium companies in North America extended their gains earlier this week on Wednesday.
Horizons ETFs portfolio manager Nick Piquard (Nick Piquard) said that with the turmoil in Kazakhstan, “people realize that we may not be able to rely on a major producer.”
(The seventh paragraph is an update on the status of the Katco mining joint venture)
– With the assistance of Yuliya Fedorinova and Francois de Beaupuy.