Kazakhstan- based uranium producer Kazatomprom said on Tuesday it expects its annual uranium production volume to fall by up to 4,000 tonnes in 2020. Previous expectations were between 22,750 and 22,800 tonnes.
CEO Galymzhan Pirmatov said the company would fully meet its contractual requirements with customers and that subsidiaries are reducing staff on-site as local restrictions concerning the coronavirus outbreak take hold.
“Measures imposed by the government of Kazakhstan, including restrictions on the movement of people and strict hygiene directives, are now covering all regions where Kazatomprom operates and have been enforced at all of our sites and offices,” said Pirmatov.
The company said it expects to provide updated 2020 guidance on May 4.
With construction of nuclear power plants at a 10-year low, uranium demand remains weak, holding prices so low that mining companies have been wary of increasing production.
“In our models, we don’t get excited on the demand side,” Pirmatov told Bloomberg.
There were 55 nuclear plants under construction in the first quarter, according to BloombergNEF.
While China is booming, with 11 of those projects, developed countries remain wary. That’s partly due to lingering concern from the 2011 Fukushima nuclear catastrophe in Japan, and partly due to high costs, Pirmatov said.
“Growth is coming from developing markets these days,” where access to electricity remains a key barrier to growth, he said. Seven of the reactors under construction are in India.
Uranium has slumped 15% this year. The metal was traded at $27.60 a pound on Tuesday.
Kazakhstan controls about 40% of the world’s supply of the metal, and Kazatomprom accounts for half of that, making it the biggest producer in the country.
(With files from Reuters and Bloomberg)