This article is 4 years old. Images might not display.
MiningNews.net is making some of its most important coverage of the COVID-19 pandemic freely available to readers. For more coverage, please see our COVID-19 hub. To subscribe to MiningNews.net, click here.
The Kazakhstan-based company's previous guidance for 2020 was 22,750-22,800t of uranium oxide, on a 100% basis.
The reduced production level should not impact on Kazatomprom's 2020 sales obligations, CEO Galymzhan Pirmatov said, noting its full contractual requirements to the nuclear industry would still be met.
"Measures imposed by the government of Kazakhstan, including restrictions on the movement of people and strict hygiene directives, are now covering all regions where Kazatomprom operates and have been enforced at all of our sites and offices," he said.
Kazotomprom expected the measures to be in place for at least three months, during which wellfield activity will be lower, but said it would update the market on May 4.
In 2019, Kazakhstan accounted for more than 42% of the world's uranium output.
Canadian major Cameco said it would be impacted by about 600,000 pounds due to its Inkai joint venture with Kazatomprom.
Before the curtailments, Cameco had expected to buy 4.9Mlb of uranium on the spot market this year.
Cameco said last month it was suspending mining and milling at the Cigar Lake and McClean Lake operations, in Saskatchewan, respectively.
CNNC Rössing Uranium has also suspended normal mining operations at the Rössing uranium mine in Namibia, with Swakop Uranium also curtailing production from the Husab mine in the country from March 28 in response to a state of emergency imposed by the local government.
The immediately tighter global uranium supply prompted spot price offers in the US$29.50-$30/lb range on Tuesday, according to data provided by Uranium Energy Corp, higher than the sub-$27/lb level seen in the year to date.
According to the company, up to 53% or 6.3Mlb per month of global uranium supply is currently curtailed, framed against total global production of 11.85Mlb.
"While we expect that COVID-19 related supply disruptions are likely temporary and not material to our long-term market balance, we note uranium supply remains highly concentrated (top five companies over 50% of global supply) with production to mostly match contract delivery schedules," Canaccord Genuity analysts said overnight.
"While spot pricing remains well below acceptable returns for the industry, the prevailing uncertainty over near-term supply is likely to induce utilities to offer improved long-term pricing to ensure future feed requirements are covered (i.e in the US circa 40% by 2022)."
ASX-listed uranium players reacted strongly to the news in early trade. Peninsula Energy and Boss Resources were each up more than 20%, while Paladin Energy was up 16%. Vimy Resources was up 12.5% and Bannerman Resources was up by over 9%.
