Could uranium be one of the energy sources to keep an eye on in the future, looking for alternatives to classic fuels? The Kazatomprom case.
While the prices of energy raw materials remain very volatile and the world looks for alternatives to fossil fuels, could uranium be one of the sources to watch in the future?
The world’s largest uranium producer, Kazakhstan’s Kazatomprom, listed on the London Stock Exchange recently, announced that the first batch of AFA 3G ТМ nuclear fuel has been shipped from Ulba Nuclear Power Plant to China.
The company’s shares are performing slightly better beating the average of the FTSE index, a factor that reopens the debate on the possibility that uranium constitutes a more than valid alternative in terms of energy sources.
Kazatomprom continues its expansion
Railway platforms with 34 Kazatomprom containers containing fuel assemblies equivalent to just over 30 tons of enriched uranium under special exhortation were delivered to China and accepted by the Chinese General Nuclear Power Corp:
"The implementation of the innovative nuclear fuel production project is an example of Kazatomprom’s contribution to mitigating the effects of global climate change and achieving the global goal of low carbon emissions. The plant of Ulba allowed the company to diversify its production by expanding its composition and producing a high-tech, export-oriented and high value-added uranium product. Successful delivery of the product to Chinese partners confirmed Kazatomprom’s reputation as a supplier reliable and beneficial to the global nuclear fuel market", said Yerzhan Mukanov, CEO of Kazatomprom, commenting on the deliveries. "The first delivery of the finished product marks the beginning of regular deliveries, and this is important not only for our companies, but significant for Kazakhstan and China", the company reported.
Kazatomprom, thanks to the raw material deposits located in Kazakhstan, extracts uranium using the ISR method and processes it in the country, which allows it to reduce logistics costs and sell fuel at the lowest prices on the global nuclear fuel market.
The Ulba metallurgical plant is used for uranium processing and went into operation in November 2021 after, among other things, helping the French company Framatome and securing an agreement with the beneficiary, China’s General Nuclear Energy Corporation .
It is the only plant in Kazakhstan producing nuclear fuel, with supply contracts 20 years in advance. The current capacity of the plant is 200 tons of enriched uranium per year. The huge amount of supplies contracted for the future could allow the company to increase revenues if the spot price of uranium continues to rise as global demand for nuclear-generated energy continues to grow.
China bets on nuclear energy
China plans to build 150 nuclear reactors over the next 15 years, more than the number of reactors built in the past 35 years, worldwide. China currently has 51 nuclear power plants, of which 20 are under construction. Nuclear power accounts for about 5 percent of China’s energy output with the country intending to focus on uranium development and nuclear power in the coming decades.
Kazatomprom, as the world’s largest uranium producer, with access to rich deposits exploited by the efficient recovery method (ISR) could benefit from the long-term trend. The company points out that the reason for the competitiveness of the uranium ore and nuclear fuel it sells is access to the ISR method of mining, which significantly reduces operating costs. Furthermore, it is estimated that the supply of uranium will still be significantly lower than the demand, creating favorable conditions for a future increase in the price of the raw material. Since the beginning of the year, and with the prospect of an economic slowdown, uranium ore prices per pound have declined from $50 to about $40 in the fourth quarter of the year. Falling prices and geopolitical risks related to Russia’s proximity have caused the company’s share price to rise relative to their 2021 valuation.
Can this trend continue?
The company assumes that East Asia’s uranium supply needs will grow more significantly than other regions of the world, by 2040. However, the forecast comes from the first quarter, when sentiment on nuclear power was even more negative both in Europe than in the United States. The ongoing energy crisis and deglobalisation trends, however, have identified nuclear energy as a efficient energy source, zero carbon and a growing number of politicians and businesses in the EU and in the United States opposes the closure of nuclear power plants.
Original article published on Money.it Italy 2022-12-22 16:13:33. Original title: L’uranio potrebbe essere l’energia del futuro?
