Kazakhstan overtakes Canada as largest uranium producer

State-controlled energy utility Kazatomprom indicated that production in 2009 reached 13,900 tons of uranium. In 2010, the company is confident of producing nearly 18,000 tons. Kazakhstan's uranium production in 2009 is reportedly equivalent to 33% of global uranium production.

At the end of 2009, Kazakhstan attained the top spot among global uranium producers. Earlier forecasts had suggested that the country would reach the top spot by 2015. The output of 13,900 tons of uranium in 2009 far exceeds Canada's output of 9,934 tons.

During the first nine months of 2009, Kazakhstan produced 9,535 tons, compared with Canada's annual output of 9,934 tons. In 2008, Canada was the world leader in uranium production. In the last three years, Kazakhstan's uranium production has witnessed steady and sustained growth.

In 2007, the country's year-on-year growth in uranium production was 26%, followed by 28% in 2008, and nearly 58% in 2009.

While Australia leads Kazakhstan in uranium reserves, Kazakhstan's geographical location and nuclear policy have guaranteed a larger customer base. Australia's Olympic Dam uranium mine, operated by BHP Billiton Limited, is considered to be the largest in the world. However, Australia's policy of not selling to countries that have not signed the Nuclear Non-Proliferation Treaty is proving to be disadvantageous.

Kazakhstan is not burdened by such a policy.

Recently, BHP Billiton revised its Olympic Dam reserve estimates, indicating there has been a 22% increase in uranium resources in the mine. According to the 2007 resource estimates published by World Nuclear Association (WNA), Australia has 1.24 million tons of proven resources, accounting for 23% of global uranium deposits. Kazakhstan's resources stand at 817,000 tons of uranium.

WNA reports indicate that global demand for uranium is expected to increase 50% in the next two to three years. Ambitious nuclear power programs in Asian countries, mainly China and India, will spur this increase in demand.

Presently, China operates 11 nuclear reactors, which contribute about 2% to the nation's energy mix. The country is expected to construct 100 nuclear power plants by 2020. Construction of five reactors began in 2009.

India, which has 17 operating reactors accounting for about 3,900 megawatts of power, recently announced plans to ramp up its nuclear power plants to generate 20,000 MW by 2020. Presently, six reactors are in various stages of construction.

Kazakhstan is also building a nuclear reactor in Aktau and is likely to construct another in Kurchatov by 2020.

News of Kazakhstan's taking top place among uranium producers comes at a time when Kazatomprom's former president Mukhtar Dzhakishev is facing trial for illegal sale of the state's uranium assets.

The announcement also comes close on the heels of global protests regarding clandestine uranium sales between Kazakhstan and Iran. There are reports that Iran, which is running out of raw materials to fuel its uranium enrichment program, has sealed a $450 million deal with Kazakhstan to procure 1,350 tons of uranium.

Both countries have vehemently denied the reports.

In 2006, the United Nations Security Council passed Resolution 1737, banning nuclear fuel supplies to Iran as a penalty for not ceasing its uranium enrichment program. The U.S. and several other allies condemned the program, stating that Iran was secretly developing nuclear missiles.

Iran refuted the allegation, indicating that it was only exploring possibilities to use nuclear power for civilian power generation.

Reports also indicate that while the spot price for uranium is $130 million for 1,350 tons, Iran is paying more than three times the value to secure supplies from Kazakhstan illegally. Sources indicate that the deal has been carried out by Kazakhstani state employees and does not have the government's approval.

On its part, the Kazakhstan government has been emphatic that the uranium deals adhere to the standards and guidelines set by the International Atomic Energy Agency.