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TUESDAY, July 22, 2014
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Kazakhstan, Russia join forces for uranium dominance

News analysis by Martin Sieff
Kazakhstan has become the world’s swing uranium producer

WASHINGTON, DC - Tuesday, July 06, 2010 - The main nuclear agencies of Russia and Kazakhstan are joining forces to export uranium to global markets, RosBusinessConsulting (RBC) reported Monday.

Russia’s Rosatom nuclear agency and Kazatomprom, the national nuclear development corporation of Kazakhstan have reached agreement about setting up a joint venture to market uranium around the world, RBC said.

The go-ahead for the ambitious project was confirmed Monday in a new memorandum on integration and cooperation in the peaceful use of atomic energy that was formally concluded by Rosatom chief Sergei Kiriyenko and Vladimir Shkolnik, the head of Kazatomprom, during Russian President Dmitry
Medvedev’s visit to Astana, the capital of Kazakhstan on Monday.

The move is of great strategic importance since China has already expressed a strong interest in purchasing vastly increased quantities of Kazakhstan’s uranium ore for the 500 next-generation civilian nuclear reactors that Beijing is planning to build over the next 30 years.

However, Kazakhstan has also joined Russia in a new customs union that became operative on July 1. Coordinating uranium exports and uranium production policy is the first concrete achievement of cooperation between the two nations under the CU umbrella.

It means Russia will strongly influence trade terms for imports of uranium from Kazakhstan in which China is going to become increasingly dependent to meet its enormous and rapidly growing power generating requirements in the 21st century.

The new agreement with Russia means that Kazakhstan will cooperate with Russia rather than having Rosatom as a formidable rival in its efforts to increase its uranium exports. Together, the two nations will be in a position to dominate the global uranium market. In 2009, Kazakhstan surpassed Canada to become the world’s largest uranium exporter.

Kazakhstan also plans a vast expansion of its mining industry over the next five years, a senior government official told the Kazakhstan International Investors Conference in Almaty on June 4.

"Mining and metallurgy have been designated as priority industries," Vice Minister of Technology and New Industries Berik Kamaliyev told the conference delegates gathered in Almaty's Intercontinental Hotel.

Mining is already a major and successful sector of the energy- and resource-rich nation's economy, Kamaliyev said. "Eighteen percent of our annual output is from mining and 20 percent of the value of our annual exports are mining products," he said.

However, Kazakhstan plans to dramatically increase the value of its mining exports by expanding its domestic industrial processing operations, Kamaliyev said.

This expansion will be carried out as part of President Nursultan Nazarbayev's economic strategy of modernizing and expanding the industrial base in Kazakhstan for long term growth, he said.

"The president has set the goal of creating value-added manufacturing," Kamaliyev said.

That will include the byproducts and processed products of the mining sector.

"By 2014, (the mining sector) will have a $32 billion volume of production, he said.

"In the next five years, the mining and metallurgical industries will receive over $16 billion in investment … Almost 85 percent of this investment will come from the private sector of our own larger Kazakh (industrial business) entities.”

To meet these goals, "We will have to double the output of the mining industry by 2014," the minister added.

Mulat Saudaukasov, deputy chairman of the Committee on Geology of the Ministry of Industry and New Technologies, told the June 4 conference that Kazakhstan still has almost unrivalled reserves of metals and valuable minerals.

As well as being the world's leading exporter of uranium, Kazakhstan ranks first in its recorded reserves of tungsten, second in recorded global reserves of chromium, fourth in global reserves of zinc and manganese, sixth in copper and eight in iron, Saudaukasov said.

The new deal signed on Monday between Kazatomprom and Rosatom marks a major step in achieving Kazakhstan’s ambitious uranium production and exporting goals.

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