Kazakhstan’s sovereign wealth fund, Samruk Kazyna, said on Wednesday it had sold a 6.27% stake in Kazatomprom, the world’s top state-owned uranium miner, for $206 million in a move that sought to take advantage of improved market sentiment.
The fund, created in 2008, said it sold the shares at $13 per global depositary receipt, a discount of about 6% to the market price. It noted it would own a 75% stake in Kazatomprom.
The sale, Samruk-Kaznya’s second since the uranium miner’s IPO, is part of an ambitious privatization plan set by Kazakhstan aimed at shoring up finances.
According to BMO analyst Alexander Pearce, the state has been targeting long-term ownership levels in line with the Organization for Economic Co-operation and Development’s (OECD) recommendations of about 15%.
Kazatomprom recently cut its 2020 output guidance because of the coronavirus pandemic. It now expects to produce about 4,000 tonnes, or 17.5% less this year. Previous estimates were between 22,750 and 22,800 tonnes.
Last year, Kazakhstan accounted for more than 42% of the world’s uranium output.
Uranium prices have been on the rise since late March as investors worry about ongoing disruption to supply, which is divided between a handful of major companies.
Prices hit $34.25 per pound on Tuesday, about 38% higher than at the beginning of March. Such an increase consolidates the commodity’s bull market position. The last time uranium traded above $30 was in February 2016. Year to date, prices have climbed almost 40%.