The world's largest uranium producer Kazatomprom will continue to 'flex down' production by 20% through 2022, Kazakhstan's national atomic company announced on Wednesday.
The company is also maintaining a 20% reduction in 2021, with no additional production planned to replace volumes lost in 2020 due to measures taken to combat the novel coronavirus (Covid-19) outbreak, according to the company’s statement.
'The decision to keep production similar year-over-year, and extend production curtailment into 2022, is indicative of a global uranium market that is still recovering from a long period of oversupply,' said Galymzhan Pirmatov, CEO of Kazatomprom.
The company’s decision to reduce production was first made on Dec. 4, 2017, when the company announced that starting from January 2018 it would cut uranium production by 20% over the next three years, as the market struggles with oversupply that has led to lower prices.
'We are simply not seeing the market signals and fundamental support needed to ramp up mine development in 2021 and take our low-cost, tier-one production centers back to full capacity in 2022,' Pirmatov added.
According to Kazatomprom, the full implementation of this decision will remove up to 5,500 tons of uranium (tU) from the anticipated global primary supply in 2022, with uranium production in Kazakhstan staying similar to the level expected in 2021.
The company's 2022 production is now expected to be between 22,000 and 22,500 tU.
A reduction in Kazatomprom's total consolidated uranium production is expected to be over 20,000 tU from its previous 2020 through 2022 production plans.
By Firdevs Yuksel