Russia and two former Soviet republics are planning to open new uranium mines and increase production at existing facilities

By investing heavily in the development of uranium mining operations, Russia and Kazakhstan in the coming years will compete for the position of the world’s top producer. Both countries, along with Uzbekistan, have adopted preliminary plans for growing uranium production. Kazakhstan intends to focus on existing developments, while Russia may boost production through the launching of new mines at deposits in northern Siberia and the Far East. Previously, uranium production from those regions was considered unprofitable at best, and nearly impossible due to the severe climate. Uzbekistan, currently the world’s seventh largest uranium producer, has also announced plans to increase production. It claims only 2% of the world’s known reserves of uranium, but experts predict that the country could increase uranium production and exports.

Drill rigs explore for new uranium in Kazakhstan.


Plans to increase the volume of uranium production came after forecasts from Russian experts who suggested that global demand for uranium will grow even faster than the World Nuclear Association (WNA) has estimated. The Russian Federal Atomic Agency (Rosatom) believes global demand for uranium will grow strongly and could double by 2030, compared with the current figure. Production could reach 130,000 metric tons per year (mt/y), but it is not clear if even this level of output would be enough to meet the world’s needs.

Demand for uranium, which has slowed in recent years due to the Fukushima incident in Japan, is now starting to recover. As a result, prices should begin to rise steadily over the next decade.

This should coincide with the startup of the Eurasian Economic Union (EEU), also known as the Eurasian Union, an economic union that was tentatively established by a treaty signed in 2014 by the leaders of Belarus, Kazakhstan and Russia. The EEU will officially go into effect in January 2015 assuming the treaty is approved by the parliaments of the three countries. Through the EEU, these three major uranium-producing countries could join efforts to increase uranium production and also work together to create a coherent export policy. They currently control a quarter of the world’s known uranium reserves and account for about a third of world production. By 2025, Russia and Kazakhstan could represent more than 50% of total world production.

Russia Plans to be Top World Producer

Russia’s uranium reserves are currently estimated at 487,000 mt, and projected reserves amount to 830,000 mt. However, many of its most promising uranium deposits are located in remote regions. The largest of these is the Elkon deposit in southern Yakutia, where projected reserves are estimated to be 344,000 mt, according to preliminary reports. The region is located near the Arctic Circle and characterized by extremely cold weather and little infrastructure. The second largest promising deposit, with about 150,000 mt of uranium, is the Streltsovskoye ore field located in the Chita region.

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Sergey Kirienko, CEO, Rosatom.

Russia has invested recently in construction of new uranium production capacities, and in 2013 output rose significantly, with production at a level almost triple that of 2012, according to the head of Rosatom, Sergey Kirienko, who said that Russia produced 8,432 mt of uranium in 2013 compared with 3,256 mt in 2012. At the same time, the average cost of production decreased, according to Rosatom, making Russian uranium competitive on the global market.

Today, Russia produces about 12% of all uranium in the world, making it the fifth largest producer. Future Russian development will more than double today’s production over the next decade, to approximately 20,000 mt/y, which would elevate Russia to the top of the world’s producer list. All of this growth will come from four major projects.

The first two-the Elkon Mining and Metallurgical Combine and the Lunar deposits-are both located in the Republic of Yakutia. The other two are the uranium mining company “Mountain” and the Olovskaya mining and chemical company. Both are located in the Trans-Baikal Territory, not far from Lake Baikal. Much of the data for the Elkon deposit is classified, but experts estimate that its development will cost about $900 million during the coming decade. The deposit contains about 6% of the world’s known recoverable reserves.

Uranium is produced by in situ leaching (ISL) technology or underground mining taking place in the Chita region. Mining and primary mineral processing are usually carried out at the same place. Russian uranium production is conducted by a monopoly, ARMZ Uranium Holding, a subsidiary of state-owned Rosatom. A successor of one of the largest mining complexes built by the Soviet Union, ARMZ is a global leader in uranium production and ranks second in terms of reserves.

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Uranium mining could become much more profitable for Rosatom. It recently discovered rare earth metals occurring along with uranium at these large deposits. Similar to most other countries, Russia is almost completely dependent on imports of rare earth metals. Rosatom said the reserves were only recently discovered and it’s too early to discuss the possible size of the reserves.

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However, the Russian government intends to invest $10 billion in these projects between 2015 and 2025, with $4.5 billion going toward production of the rare earth metals. In late 2013, Minister of Industry and Trade of the Russian Federation Denis Manturov met with Russian President Vladimir Putin and announced that Russia could completely abandon rare earth metals imports by 2020. Out of the $4.5 billion, Russia will provide only about $600 million from the state budget, with the rest of the money expected to be contributed by private sources.

According to Manturov, the government plans to involve the state-owned corporation Rosteh (Russian Technologies) in this project to handle development and production of all necessary equipment and other technologies in order to improve the effectiveness of mining.

Kazakhstan Sees Future Potential

JSC National Atomic Co. (Kazatomprom), which has a monopoly on the production of uranium in Kazakhstan, recently disclosed plans to boost its proven reserves of uranium and to gradually increase uranium production, with its highest production level not arriving until 2025 or even 2030, when according to forecasts, prices will rise from strong demand.

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Vladimir Shkolnik, chairman, Kazatomprom.

According to Vladimir Shkolnik, chairman of Kazatomprom, the company plans to increase its proven reserves by 250,000 mt over the current 1.6 million mt of proven reserves, which would put the country in second place in the world in terms of proven reserves of uranium. The country has dozens of significant uranium deposits that vary geologically. According to Kazakh geologists, there are six major uranium-bearing regions: Chu-Sarysu, Syrdarya, North Kazakhstan, the Caspian, Balkhash and Ili.

Shkolnik believes that by 2020, proven reserves should rise to 1.85 million mt. “The company is thinking about uranium reserves for future generations,” Shkolnik said. “For each ton of mined uranium, we will add at least 2 to 3 tons to our proven resources.”

Until recently, Kazakhstan had steadily increased uranium production after the fall of the Soviet Union. According to official statistics, it produced 2,800 mt of uranium in 2002, increasing almost five-fold to 13,800 mt in 2009. However, in the followingyears production tapered off slightly. Kazatomprom said that in 2012 it produced 11,923 mt-still more than 17% of world production.

The Kazakh uranium industry employs more than 24,000 and, in contrast to Russia, is almost fully focused on the export business. In 2012, the country exported 9,260 mt of uranium concentrate.

Kazatomprom recently identified several large investment projects, which could more than double uranium production in the short term. According to an official statement from the company, Kazatomprom plans to increase uranium production to 25,000 mt by 2015 by launching several new mines in Chu-Sarysu and North Kazakhstan. Shkolnik believes this will allow the country to maintain its position as the world’s largest uranium producer, a position it has held since 2009.

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Underground uranium mining in Russia.


At the same time, there is no clarity as to what the future of the Kazakh industry will entail. Currently, almost all uranium production in the country comes from six main operating deposits: Uvanas, East Mynkuduk, Central Mynkuduk, Kanzhugan, North and South Karamurun, but there are about three dozen other deposits that potentially may let the country boost current mine production by three or four times, according to conservative estimates.

At the same time, there is no clarity as to what the future of the Kazakh industry will entail. Currently, almost all uranium production in the country comes from six main operating deposits: Uvanas, East Mynkuduk, Central Mynkuduk, Kanzhugan, North and South Karamurun, but there are about three dozen other deposits that potentially may let the country boost current mine production by three or four times, according to conservative estimates.

Kazakh uranium is cheap-more than 50% of current resources are in the “low-cost” category-meaning less than $34/kg to produce. Uranium production from Russian mines on average is more expensive, by 30% to 50%.

Most Kazakh resources are concentrated in rich, compact deposits predisposed to ISL. Another benefit for the Kazakh uranium industry is a relatively good infrastructure, not just for mining, but also for the transportation of concentrate. Russia would have to invest millions of dollars to build infrastructure in the northeast part of the country to compete with Kazakhstan.

Kazakhstan has used underground leaching exclusively since the mid-1990s. The executives at Kazatomprom, however, realize that other mining methods could be used for new development in the Chu-Sarysu uranium ore province in southern Kazakhstan, which will probably be the largest and most valuable future development. It will likely be the main center for industry development during the coming decades.

Kazakhstan also plans to increase its volume of uranium exports through the opening of new foreign markets. So far, the main markets for Kazakh uranium have been Asian countries, including China, Japan, India and South Korea.By 2025, Kazatomprom plans to supply its uranium to 25 countries aroundthe world.

Moreover, the country’s government intends to stimulate the growth of domestic demand for uranium. Kazakhstan has plans to build several nuclear power stations in different parts of the country, and has already signed agreements with Westinghouse-in which it acquired a 10% interest in 2007.

Uzbekistan Spends to Improve Production

Uzbekistan has devoted a lot of attention to uranium development. From 2008 to 2012, Uzbekistan invested $165 million in expansion and modernization of its uranium industry, according to official government information. It cannot compete with Russia or Kazakhstan in terms of uranium production, but is a large producer on its own and plans to double production in the near term. At the end of 2013, Uzbekistan had completed construction of three uranium mines: Alenda, Aulbek and North Kanimekh. Total project cost was $70 million, and these mines are expected to reach full production capacity by 2015. Uzbekuranium production should increasesignificantly from the current 2,400 mt to 4,000 mt.

Just as in Russia and Kazakhstan, all uranium production in Uzbekistan is monopolized. The new mines are included in the uranium-mining complex Navoi Mining and Metallurgical Combine (NMMC), which is the only enterprise in Uzbekistan engaged in production and export of uranium.

Today, Uzbekistan is the seventh largest producer of uranium in the world. According to the World Nuclear Association, Uzbekistan’s reserves are much smaller than Kazakhstan’s. Kazakhstan accounts for about 14% of the world’s uranium reserves, while Uzbekistan reports only 55,000 mt. However, experts believe the country contains much more uranium, and its potential resources remain largely unexplored. According to officials, improvement in global demand and prices could stimulate the government to consider increasing investments, with production by 2030 conceivably growing to as muchas 10,000 mt/y.

At the same time, Uzbekistan may become a member of the EEU. In this case, the three largest CIS uranium producers could establish joint export/import policies including natural resources. As a result, a single player would be created with annual uranium production of about 60,000 mt/y, representing about 70% of the global market.

Uzbekistan, however, has problems related to uranium mining principal, among them the storage and disposal of vast amounts of waste rock containing radioactive elements. Local experts claim that, because of corruption, waste disposal is not handled properly. Members of the country’s Parliament said that the Uzbek uranium industry’s environmental record is the worst among the world’s top 10 largest producers.

NMMC’s uranium resource base consists of 20 fields and 10 prospective areas. Up until 2007, the Uzbekh uranium industry was characterized by failing physical assets and lack of investment, but in recent years the situation has improved. During the last 15 years, all mining there has been by blasthole ISL. According to NMMC, this technology will fundamentally change and increase the resource base by allowing it to profitably mine low-grade, sandstone-type ore deposits from the Kyzylkum region. Development of deposits will likely use high-performance drilling equipment. Most operating mines have been re-equipped in the last five years.

NMMC has built and commissioned two new mines at the Kendyktyube and Lyavlyakan deposits, and conducted pilot projects for extraction of uranium at the Sugraly and Tohumbet deposits. Recently, it placed into operation the Kanimekh North, Alenda and Meylisay deposits. Currently, extraction of uranium is taking place at six deposits, while preliminary testing is under way prior to the startup of mining at nine other deposits.

According to NMMC, estimated reserves of uranium in the country amount to 185,800 mt, including 138,800 mt in sandstone uranium deposits and 47,000 mt in black shale deposits.