Uranium production cuts are getting bigger and the stocks keep going higher. The cuts will last for 3 years so it's really big news, and even bigger than the Cameco cut announced a few weeks ago.
NAC KazAtomProm will reduce planned uranium production by 20% to better align output with demand, the company announced today. The cuts will be enacted for a period of three years beginning in January 2018, it added.
The 20% cuts, under Subsoil Use Contracts of Company enterprises, will result in deferral of the production of 11,000 tU over the period. The estimated cut of 4000 tU in 2018 alone represents about 7.5% of global uranium production for 2018, as forecast by UxC, KazAtomProm said. The company said it has informed all its major customers of its decision, and confirmed that future contractual delivery obligations will not be affected.
"Given the challenging market conditions, and in light of continued oversupply in the uranium market, we have taken the strategic decision to reduce production in order to better align our production levels with market demand," KazAtomProm chairman Galymzhan Pirmatov said. "We believe that these measures strongly underline our commitment to ensuring the long-term sustainability of uranium mining; a critical component in the generation of clean, carbon free electricity around the globe."
Kazakhstan has 12% of the world's uranium resources and has been the world's leading uranium producer since 2009. Its 2015 production of 24,560 tU accounted for 39% of world production. The country had planned to increase its production year on year to 2018, but in January KazAtomProm announced that it would to produce 10% less uranium in 2017 than previously planned in response to ongoing oversupply in the uranium market. Minister of Energy Kanat Bozumbayev recently said the country's 2017 uranium production is forecast to be 22,150 tU.
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