TBY talks to Galymzhan Pirmatov, President of Cameco, on the potential for further growth in the uranium sector and Kazakhstan’s position as one of the world’s leading producers.
TBY Cameco is one of the world’s largest uranium producers, roughly accounting for 16% of global production. How has your business evolved since your entry into the Kazakhstani market?
GALYMZHAN PIRMATOV In its early years as a publicly traded company, Cameco’s uranium production was centered in Canada. Right after Kazakhstan gained its independence Cameco was one of the first to recognize Kazakhstan’s huge potential for uranium production, although the full extent of that potential was not known at the time. We saw potential early on that, by producing in Kazakhstan, we could diversify our production base, which is a value to our customers as production risk is spread over several production centers in different countries. The first visit by Cameco to Kazakhstan took place in 1992, and early exploration and development work led to the formation of the joint venture Inkai between Cameco and Kazatomprom in 1996. In 1999 our joint venture received a license and in 2000 signed the sub-soil use contract to develop the significant uranium deposit at Inkai. Now, more than a decade later, Inkai is taking its place as an important production center for both companies, producing over 1,600 metric tons of uranium (MtU) in 2010. We have promoted Inkai as a success story through the President’s Foreign Investment Council. Opening our office in Astana in 2010, in addition to the long-established JV Inkai offices in Almaty and Taikonur, shows action on our commitment to Kazakhstan. Cameco’s growth strategy is to double its annual uranium production to 40 million pounds by 2018 and Inkai is a key component of our plan. We value our relationships with Kazatomprom and the Kazakhstani government and are pleased to be a partner in establishing this region as a sustainable, reliable uranium production center for the long term.
How has the Cameco culture contributed to the development of Kazakhstan’s energy potential?
Cameco has extensive experience and expertise to share with its Kazakhstani partner to operate uranium mines to the highest environmental and worker health and safety standards. We can also offer access to our proprietary refining and conversion technology. One of the key strategic goals of our partner Kazatomprom is to build a vertically integrated company with capabilities in mining, conversion, enrichment, and fuel fabrication. We, as a partner, can support Kazatomprom to achieve its strategic goal. Cameco, with its strong financial position, also brings direct foreign financing to the country, and we were responsible for financing the initial capital costs of Inkai.
President Nazarbayev has expressed Kazakhstan’s will to host a nuclear fuel bank. How realistic is it that the country will produce fuel and become the center of the global fuel trade?
President Nazarbayev is a well-recognized international leader with a very strong agenda for nuclear non-proliferation and nuclear safety. Since its independence, Kazakhstan has consistently proven its commitment to nuclear non-proliferation and has many of the supporting factors to accommodate and host a nuclear fuel bank if and when it is created by the international community. As part of its strategic goals, Kazatomprom is working to build its own fuel fabrication capability in Kazakhstan.
How do you see Kazakhstan’s agenda for power generation via nuclear power plants?
Most of the growing world demand for power is coming from emerging economies. That is why we share a strong view of the future of the nuclear industry as one of the key elements of the overall energy mix. Early discussions are ongoing at the government level to build a nuclear power plant in Kazakhstan, and safety is obviously an important part of that discussion, especially after the events at Fukushima. Kazakhstan can have nuclear energy in its overall energy mix in the long-term perspective.
How do you see the interplay of the political will and the legal framework? What steps can be taken to carry the nuclear agenda forward?
Although oil and gas are a big part of the Kazakhstani economy, Kazakhstan’s uranium sector is a much bigger part of the world’s nuclear industry. The government understands its leading role in the sector ,and we expect Kazakhstan to become an even bigger part of the world nuclear industry. Kazakhstan has an open economy that is mostly driven by commodities. There is a strong desire to diversify the economy, plans to improve the business environment and invest in infrastructure, and an understanding of the importance of foreign investments.
What is your outlook with respect to supply and demand for nuclear fuel in the post-Fukushima world?
Each form of power generation, be it nuclear, coal, or gas, has its own safety challenges. The nuclear industry worldwide, and in Kazakhstan, has a very strong safety culture. After Fukushima we expect that newly constructed nuclear plants will go through even more rigorous safety reviews by regulators. Nuclear will continue to be a part of the energy mix as it’s clean, economically viable, and the industry is much better and experienced now at running nuclear power plants. We believe that the long-term demand for nuclear energy will not be affected by the events at Fukushima in any major way.
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