Cameco's Inkai joint venture project in Kazakhstan has been forced to suspend uranium production due to a bureaucratic hold-up stemming from a delayed submission of paperwork to Kazakhstan's energy ministry. The suspension adds uncertainty to Kazakhstan's near-term uranium production ramp-up, but Kazatomprom, the Kazakh state-owned company partnered with Cameco, expects a swift resolution.
Cameco ’s (TSX: CCO; NYSE: CCJ) Inkai joint venture project in Kazakhstan has suspended uranium production because of a bureaucratic holdup, the Canadian producer said Thursday. The in-situ recovery JV, in which Cameco holds a 40% stake and state-owned Kazatomprom (LSE: KAP) holds 60%, didn’t get an extension to submit its project paperwork because of a delayed submission to Kazakhstan ’s energy ministry. The extension was expected to come through last year, and as recently as Dec.
26 reports hadn’t indicated that production might be suspended, Cameco said in a release. The Saskatoon-based company’s shares gained 1.8% to C$75.28 apiece on Thursday morning in Toronto, for a market capitalization of C$32.7 billion ($22.7 billion). Its shares traded in a 52-week range of C$48.71 to C$88.18. Shares in Kazatomprom fell 2.1% to $36.95 apiece in London, giving it a market cap of £7.8 million ($9.6 million). The Inkai suspension adds more uncertainty to Kazakhstan’s near-term uranium production ramp up, BMO Capital Markets analyst Alexander Pearce wrote in a note on Thursday. Kazatomprom’s announcement suggests the paperwork approvals should be resolved shortly, Pearce said. In the meantime the spot uranium price could rise if Cameco and Kazatomprom have to purchase supplies to meet sales commitments, he said. “The company highlighted that documentation is expected to be submitted in the next couple of weeks, but it is not clear on a timeline for the approvals process and commencement of operations,” Pearce said. Still, Kazatomprom doesn’t expect any significant impact on its production forecast this year of 65-68.9 million tonnes of uranium oxide (UA. As the largest uranium operation in the Central Asian country, Inkai’s output should total 9.3 million lb. this year, representing 14% of Kazakhstan’s production and 16% for Cameco, BMO forecast
URANIUM PRODUCTION KAZAKHSTAN CAMECO KAZATOMPROM JOINT VENTURE
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