The world’s biggest uranium miner warns that the war in Ukraine is hampering supplies in the west

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Kazatomprom’s chief executive has warned that Russia’s war against Ukraine is making it harder for the world’s biggest uranium producer to keep supplying the west as the gravitational pull to Moscow and Beijing grows stronger.

Meirzhan Yussupov, the head of the Kazakh state miner, said sanctions caused by the war had created obstacles to the supply of Western utilities.

“It is much easier for us to sell most, if not all, of our production to our Asian partners – I wouldn’t say (other than) the country in question. . . They can consume almost all of our production, or our northern partners,” he told the FT.

He added, however, “It’s a lot easier to sell them, but we don’t want to put all our eggs in one basket.”

The Astana-based miner, of which the Kazakh state owns 75%, wants to keep a diverse customer mix that includes US and European utilities, although shipping the material via the traditional and cheaper route via St Petersburg is no longer an option because of the risk of sanctions.

Kazatomprom, which is listed in Astana and London, sought to establish an alternative route to ship materials via the Caspian Sea, Azerbaijan, Georgia and the Black Sea at a higher cost.

Kazakhstan produces 43% of the world’s uranium, the equivalent of the OPEC cartel’s market share of oil. But Russia’s potential influence over its Central Asian neighbor has been a growing source of concern for Western utilities and industry partners.

“You’re going to see some changes,” said Leigh Curyer, chief executive of NexGen Energy, which is developing a large uranium mining project in Canada. “Perhaps their production will increase to serve Russia and China. If this is the case, utilities in the western world will turn to suppliers in the western world. . . I think we’re already seeing signs of that.”

Rosatom, Russia’s nuclear monopoly, has a stake in five of Kazatomprom’s 14 fields. Under these arrangements, it receives 20 percent of the country’s production, Yussupov said.

Adding to this challenge is the fact that Russia and China are leading the construction of new nuclear power plants globally.

In 2022, the company disclosed in a footnote in its annual report that the company’s ownership of a 49% stake in Budenovskoye, a giant deposit that Kazatomprom is developing, had been transferred to entities including Rosatom subsidiary Uranium One. The lack of transparency about the disposal has caused concerns internally, according to a person with direct knowledge of the matter.

A dozen senior Kazatomprom executives have left in the past two years, according to the disclosures. Kazatomprom denied that the exodus was partly related to the stake sale.

“There is not that much concern” about Rosatom’s level of involvement, citing lower levels of interdependence between the two countries compared to the oil and gas sector, Yussupov said.

But he added: “There is, of course, concern.”

The chief’s comments came after the company last month cut its 2025 production forecast by 17% and suspended its guidance for 2026. He cited a shortage of sulfuric acid, essential for uranium mining, and construction delays for facilities surface and infrastructure.

Kazatomprom last year sent 49% of the uranium under its control to the Asian market, 32% to Europe and 19% to the US market, according to its latest annual report.

“We are very serious about diversifying the geography of our sales,” Yussupov said.

Katie Mallinson, a partner at Prism Political Risk Management, a business intelligence company, said Kazakhstan had come under increasing pressure from Russia and China to restrict its interaction with Western nations, particularly when US troops left Afghanistan in 2021.

“This is particularly the case with uranium, where it plays a critical role in the global supply chain,” she said.

“Russia has increased its stake in Kazakhstan’s uranium production, and Kazakhstan has committed more and more of its supply to the Chinese market. This leaves serious long-term questions about how much uranium will be available in Western markets.”