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INTERVIEW-Kazatomprom sees uranium output flat, looks to rare earths
April 1, 2014 / 2:06 PM / in 4 years

INTERVIEW-Kazatomprom sees uranium output flat, looks to rare earths

* Considering short-term foreign bank loan of $100-$200 mln

* To increase reserves over 180,000 T by 2020 from 1.6 mln

* Studying buying tantalum, niobium deposits in Africa

By Mariya Gordeyeva

ASTANA, April 1 (Reuters) - Kazakhstan, the world’s largest producer of uranium, will keep output steady this year as long as prices stay low, although it expects a big increase in reserves, the head of state uranium company Kazatomprom said on Tuesday.

Meanwhile, prices for rare earth metals have soared in recent years, and Kazatomprom aims to produce them and may even buy deposits abroad, Kazatomprom head Vladimir Shkolnik told Reuters in an interview.

“In 2014, uranium output will remain at the level in 2013, which is around 22,500 tonnes, including Kazatomprom’s share of 12,500 tonnes,” he said. “We will be guided by demand on the market ... maybe it (output) will be higher.”

Kazatomprom, which employs more than 25,000 people, earlier said that Kazakhstan planned to boost uranium output to as much as 25,000 tonnes by 2015.

Last year Kazakhstan alone accounted for more than 38 percent of global uranium production of around 58,800 tonnes, Kazatomprom data showed.

“Strategically, we will continue holding our market share of around 35 percent of the world’s (uranium) extraction and output,” Shkolnik said.

Uranium prices have not risen above $34 per pound for well over a year, he said, adding that Kazatomprom did not expect a rise in profit this year and may borrow abroad.

“We expect net profit to stay at the 2013 level of about 36 billion tenge ($200 million),” Shkolnik said.

“It’s quite possible that short-term loans will be arranged with international banks for our current activity,” he said. “The talk is about sums of between $100 million and $200 million. At present we do not plan to issue debt securities.”

The Central Asian nation, which has no nuclear power stations and does not use uranium byproducts, holds more than 15 percent of global uranium reserves, second only to Australia‘s. It surpassed Canada in 2009 as the world’s top producer.

“Our reserves total 1.6 million tonnes,” Shkolnik said. “By 2020 we expect a rise (in reserves) by more than 180,000 tonnes ... which means our resource base will rise faster than output.”

KAZATOMPROM SETS EYES ON RARE EARTHS

Neighbouring China produces more than 90 percent of the world’s rare earth metals, a group of 17 elements used in a wide variety of applications including smartphones, wind turbines and industrial catalysts.

Resource-rich Kazakhstan, five times the size of France but with a population of only 17 million, is keen to carve out a niche for itself in the lucrative business.

“As for rare earths, we are studying the issue of acquiring deposits of tantalum and niobium in Africa ... we are looking at various (areas) with already explored reserves,” he said, declining to give further details.

He said Kaztomprom was also considering buying licences to develop domestic rare earth metal deposits. “The market is vast - from Japan to Europe and Russia,” he said.

In 2012, SARECO, Kazatomprom’s joint venture with Japan’s Sumitomo Corp, inaugurated Kazakhstan’s first plant to produce total rare earth oxides, widely known in the industry by its acronym TREOs.

“Output has already been launched. It is planned that SARECO will achieve (production) volumes of around 3,000 tonnes of TREOs a year” by 2016 and 2017, Shkolnik said.

The venture plans to increase production cautiously so as to keep prices from plummeting. “Our main target is output with a maximum added value,” he said.

The first shipments of rare earth metals of Kazakh origin are set for May, he said but gave no details. He did not say the volume of TREOs Kazakhstan could produce in 2014 and 2015.

Next year, the venture also plans to launch production and processing of rare earth alloys and magnets, he said.

“Together with Sumitomo, we are now working with our potential consumers - Japan, France and Russia,” Shkolnik said. “We plan to complete this work and sign contracts in the near future.” (Writing by Dmitry Solovyov; editing by Jane Baird)

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