Kazakhstan Unrest Pushes Up Uranium and Oil Prices

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The resource-rich country accounts for about 40% of the world’s uranium production, which it sells to utilities in the US and elsewhere.

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Traders and Western mining companies say the protests could make it difficult to transport workers and equipment to mine sites, and increase exports outside the country.

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Kazakhstan, a Russian ally, produces about 40% of the world’s uranium production and sells it to utilities in the US and other Western countries, as well as China. It has established a reputation as a reliable supplier.

Uranium prices have surged since Sunday’s protests in Kazakhstan’s western Mangystau region over rising energy prices, prompting the government to resign. A lightly processed form of uranium known as U3O8 is expected to trade above $46 a pound on Thursday, traders said. It is up from $45.25 on Wednesday and $42 at the start of the year.

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The protests also pushed up crude oil prices. According to the International Energy Agency, Kazakhstan is a member of the OPEC+ alliance and produced about 1.7 million barrels of oil a day in November, less than 2% of the world’s every day consumption last year.

beam Corporation

, which owns 50% of the joint venture running Kazakhstan’s Tengiz oil field, said it had cut production after protests at the facility.

“Production operations continue, although temporary adjustments have been made to production due to logistics,” a Chevron spokesperson said. “Many contractor workers have gathered in the Tengiz region in support of the protests taking place across Kazakhstan.”

Traders and mining companies said the unrest could affect uranium distribution if it is not resolved quickly. Most mining in Kazakhstan is done through a process called in-situ leaching that requires a steady supply of pipes for line wells to be drilled in the ground, as well as sulfuric acid to pump uranium to the surface. it happens.

The volatility came at a vulnerable time for the uranium markets. According to UxC LLC, prices are 50% higher than they were 12 months ago. The Japanese reactor meltdown in 2011 brought an end to a long-running recession, which caused Japan and Germany to close nuclear-power stations, reducing demand.

Shares of state-owned uranium miner, National Atomic Company Kazatomprom JSC, fell 6.7% in London on Thursday.

Planned deliveries to customers have not yet been interrupted as miners keep six to seven months’ worth of uranium in inventory worldwide, a Kazatomprom spokesperson said by email. “Of course it will have an impact if you have cities and towns with a lockdown, limited telecommunications and a financial system temporarily shutting down,” he said.

Supply has dwindled somewhat as investors bought the fuel in a condition that governments would adopt nuclear power to plug carbon emissions. Kazatomprom and Canada’s Camco Corporation

The second-largest producer has cut production to stem the glut that emerged after Japan’s Fukushima nuclear-plant disaster in 2011.

A person familiar with the matter said Camco, which owns 40% of the joint uranium venture with Kazatomprom in Inkai in central southern Kazakhstan, could not communicate with its employees there when the Internet was shut down. The company has re-established contact with its team. Logistical difficulties can reduce production, the person said.

Nuclear reactors run by utilities, which typically buy uranium years ago, will not be immediately hit by rising prices. But reliance on Kazakh and Canadian uranium could lead utilities to diversify their supply, said Arthur Hyde, partner at uranium-focused hedge fund Segra Capital Management.

“Over the past 15 years, Kazakhstan has been an incredibly stable supplier,” said Mr. Hyde. “If Kazakhstan is starting to be seen as less stable, there aren’t a lot of places to go.”

—Benot Faucon contributed to this article.

Write to Joe Wallace at [email protected]

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