Kazakhstan, the world’s largest uranium producer, is making “active efforts” to enhance its uranium exports to the United States. On Tuesday, the country’s Ministry of Energy stated that they had met with U.S. Senator Steve Daines to discuss cooperation in the energy sector. Against the backdrop of the Russia-Ukraine war, the United States, in addition to expanding domestic uranium production capacity, appears to consider Kazakhstan as an important partner to ensure the security of its nuclear energy supply chain.
Prior to this, Kazakhstan had signed long-term uranium supply agreements with a group of U.S. energy companies extending until 2032, including Southern Co (NYSE: SO), Constellation Energy Corp. (NASDAQ: CEG), and Duke Energy (NYSE: DUK).
Kazakhstan is the world’s top uranium producer, with a mining output of 21,227 tons in 2022. This accounts for a significant 43% of global uranium production from a single country. Moreover, the country has known recoverable uranium resources of 815,200 tons (2021 data), second only to Australia, with state-owned Kazatomprom (LSE: KAP) being the world’s largest uranium producer.
Global uranium production peaked in 2016. Now, in response to the challenges posed by climate change, governments worldwide are reevaluating the development of nuclear energy. The share of nuclear power in global electricity generation is expected to increase beyond the current 10%. As a result, demand for uranium is rising, leading to a widening supply gap and sustained increases in uranium prices.
Following the outbreak of the Russia-Ukraine conflict, the United States is considering banning imports of Russian enriched uranium, which increases the supply risk of this metal. Data from 2021 show that over 20% of the United States’ electricity generation comes from nuclear power, with 16% of the U.S. utility companies’ enriched uranium supply originating from Russia. Other major suppliers include Kazakhstan and Uzbekistan.
For Kazakhstan, the country has been striving to establish itself as a reliable partner for stable uranium supply worldwide. If the United States continues to reduce its dependence on Russian low-enriched uranium in the coming years, Kazakhstan, along with the world’s largest uranium mining company Kazatomprom, is likely to increase its uranium exports to U.S. customers.
