Monday, August 21, 2006

Will Kazakhstan become the world's largest producer of uranium?

There has been significant attention paid to the importance of Kazakhstan's oil reserves in the world of energy, but there has been far less attention paid to the uranium reserves in the country. A recent piece on the financial analyst website bloomberg.com points out that Kazakhstan is in the middle of a serious Asian competition for scarce reserves of uranium. As Kazakhstan readies for the visit of Japanese prime minister Koizumi, some international financial analysts are suggesting that an important aspect of Koizumi's trip will be his efforts to ensure that Kazakhstan will begin to look towards Japan more than towards China as a partner in its mining of uranium. While several Japanese companies are interested in attaining uranium mining rights in Kazakhstan, none are presently partners with the state-owned uranium monopoly in Kazakhstan, Kazatomprom. Kazatomprom, however, already has joint ventures with international partners from Canada, France, Russia, Kyrgyzstan, Ukraine, and China.
The Bloomberg article also notes that Kazakhstan is presently the third largest producer of uranium in the world, after Canada and Australia, and it wants to become the largest producer of this valued resource by 2010. Given that the price of uranium has quadrupled in the last three years and is presently approaching $50 a pound, Kazakhstan's sales of uranium could become an increasingly important sector of its economy. This is especially true in the context of Asia's present intrest in nuclear energy. Not only are Japan and China in competition in this realm, but India and Korea are also extremely interested in accessing uranium reserves to assist them in meeting their energy needs. If Kazakhstan's oil development is any indication of how uranium mining might progress in the country, Kazakhstan can be expected to use this competition to its advantage and include as many interested international partners from as many different countries as feasible.

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