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Uranium and Nuclear Power in Kazakhstan

(July 2008)

Kazakhstan has been an important source of uranium for more than fifty years. Over 2001-2006 production rose from 2000 to 5279 tonnes U per year, and further mine development is under way with a view to annual production of 18,000 tU/yr by 2010 and 30,000 tU by 2018.

It has no national electricity grid, but a northern grid links to Russia and a southern one links to Kyrgystan and Uzbekistan. Electricity consumption is 48 TWh/yr, from 17 GWe of plant, mostly fossil fuel fired and now privatised.

Kazatomprom is the national atomic company set up in 1997 and owned by the government. It controls all uranium exploration and mining as well as other nuclear-related activities, including imports and exports of nuclear materials.  It announced in 2008 that it aims to supply 30% of the world uranium by 2015, and through joint ventures: 12% of uranium conversion market, 6% of enrichment, and 30% of the fuel fabrication market by then.

Recent international collaboration

Kazatomprom has forged major strategic links with Russia, Japan and China, as well as taking a significant share in the international nuclear company Westinghouse. Canadian and French companies are involved with uranium mining and other aspects of the fuel cycle.

In July 2006 Russia and Kazakhstan (Kazatomprom) signed three 50:50 nuclear joint venture agreements totalling US$ 10 billion for new nuclear reactors, uranium production and enrichment. The first JV with Atomstroyexport is JV Atomniye Stantsii for development and marketing of innovative small and medium-sized reactors, starting with OKBM's VBER-300 as baseline for Kazakh units. Russia's Atomstroyexport expects to build the initial one.

The second JV with Tenex is for a uranium enrichment plant at Angarsk in southern Siberia where Russia has its main conversion plant and a small enrichment plant; this will be the first international enrichment centre. It will eventually be capable of enriching the whole 6000 tonnes of uranium production from Russian mining JVs in Kazakhstan.

The uranium exploration and mining JV Akbastau with Tenex will start with Budenovskoye in the Stepnoye area of south Kazakhstan, which is due to start production in 2008. This will complement the Zarechnoye JV 250 km to the south which was set up in June. (details below)

In April 2007 a number of high-level agreements on energy cooperation were signed with Japan. These included some relating to uranium supply to Japan, and technical assistance to Kazakhstan in relation to fuel cycle developments and nuclear reactor construction.  A further agreement on uranium supply and Japanese help in upgrading the Ulba fuel fabrication plant was signed in may 2008.  Kazatomprom is keen to move from being a supplier of raw materials to selling its uranium as fabricated fuel assemblies.  It said that it aimed to supply 40% of the Japanese market for both natural uranium and fabricated fuel from 2010 - about 4000 tU per year.  Negotiations then commenced for a bilateral nuclear cooperation agreement between Kazakhstan and Japan.

In August 2006 The Japan Bank for International Cooperation had signed an agreement with Kazatomprom to support and finance Japanese firms in developing Kazakh uranium resources to supply Japan's power generation.

In December 2006 China Guangdong Nuclear Power Group Holdings (CGNPC) signed a strategic cooperation agreement with Kazatomprom, in May 2007 an agreement on uranium supply and fuel fabrication, and in September 2007 agreements on Chinese participation in Kazakh uranium mining joint ventures and on Kazatomprom investment in China's nuclear power industry. This is a major strategic arrangement for both companies, with Kazatomprom to become the main uranium and nuclear fuel supplier to CGNPC (accounting for a large share of the new reactors being built in China). A framework strategic cooperation agreement was then signed with China National Nuclear Corporation (CNNC).

Late in 2007 Kazatomprom signed an agreement with both GCNPC and CNNC for them to take a 49% stake in two uranium mine joint ventures and supply 2000 tU per year from them.

In addition Kazakhstan has signed intergovernmental agreements on nuclear energy cooperation with the USA and Euratom, and is seeking a fuel supply agreement with South Korea.

At the corporate level, in mid 2007 it was widely reported that Kazatomprom was negotiating the purchase of a 10% share in Westinghouse. Toshiba bought the company from BNFL for $5.4 billion early in 2006, and the Shaw Group then took 20% and IHI Corp. 3%. Toshiba originally envisaged holding only 51%, and this deal would reduce its holding to 67%. The new ownership would strengthen the company's upstream links for fuel supplies, enhancing its marketing of nuclear reactors (the vendor usually supplies the first core for a new reactor, and ongoing fuel services may be offered in addition). It would also bring Kazatomprom more fully into the industry mainstream, with fuel fabrication in particular.

In May 2007 Canada's Cameco Corporation signed an agreement with Kazatomprom to investigate setting up a uranium conversion plant, using its technology, and also increasing uranium production at its 60% owned Inkai mine.  In June 2008 Cameco and Kazatomprom announced the formation of a new company - Ulba Conversion LLP - to build a 12,000 t/yr uranium hexafluoride conversion plant at the Ulba Metallurgical Plant in Ust-Kamenogorsk.  Cameco will provide the technology and hold 49% of the project.  A feasibility study is due to be completed mid 2009.

In June 2008 Areva signed a strategic agreement (MOU) with Kazatomprom to expand the existing Katco joint venture from mining 1500 tU/yr to 4000 tU/yr (with Areva handling all sales), to draw on Areva's engineering expertise in a second JV (49% Areava) to install 1200 tonnes per year fuel fabrication capacity at the Ulba Metallurgical Plant, and in a third JV (51% Areva) to market fabricated fuel.  The agreement is to be concluded in September.

Uranium mining

Uranium exploration started in 1948 and economic mineralisation was found is several parts of the country and this supported various mines exploiting hard rock deposits. Some 50 uranium deposits are known, in six uranium provinces. Reasonably Assured Resources plus Inferred Resources to US$ 130/kgU were 816,000 tU at 2005.

In 1970 tests on in situ leach (ISL) mining commenced and were successful, which led to further exploration being focused on two sedimentary basins with ISL potential.

Up to 2000 twice as much uranium had been mined in hard rock deposits than sedimentary ISL, but almost all production is now from ISL. Uranium production dropped to one quarter of its previous level 1991 to 1997.

Kazakh Uranium Production and Revenue 

year	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007
tonnes U	795	1073	1367	1752	2022	2709	2946	3712	4346	5280	7200+
revenue	6405	8660	15876	18361	19954	23822	28330	36849	50567	89422

Source: Kazatomprom, currency KZT million

The last surviving underground mines at Grachev and Vostok in the Northern province had been operating since 1958 and are now rather depleted. KazSabton operated them, having taken over from Tselinny Mining & Chemical Co in 1999. It treated the ore at the Stepnogorsk mill, yielding some 250 tU per year. Production from the plant is now listed as some 500 tU/yr going forward to 2010.

In the Balkash province some mining of volcanogenic deposits occurred during the Soviet era. In the Ili province east of this there is some uranium in coal deposits.

In the Caspian province the Prikaspisky Combine operated a major mining and processing complex on the Mangyshalk Peninsula in the 1960s and this led to the founding of Aktau. It was privatised as Kaskor in 1992 and operations ceased in 1994.

The operating and planned ISL mine groups are in the central south of the country and controlled by the state corporation Kazatomprom. Stepnoye has been operating since 1978, Tsentralnoye since 1982 - both in the Chu-Sarysu basin/ province, which has more than half the country's known resources. The No.6 Mining group has operated since 1985 in the Syrdarya basin/ province slightly to the west. All have substantial resources - well over 40,000 t U₃O₈ each. A new processing plant is due to be commissioned in 2004 at Tsentralnoye.

The ISL mines and projects in the two central southern provinces are in four groups, as set out below. Production costs from these are understood to be low. Uranium One in September 2007 was quoting "cash cost" figures of $8.00 to $10.50/lb for three mines it is involved with. A further feature of Kazakh uranium mining is that Kazatomprom plans to establish new mines in three years, compared with twice this time or more in the West, due to regulatory hurdles.

ISL uranium production in Kazakhstan requires large quantities of sulfuric acid*, due to relatively high levels of carbonate in the orebodies. A fire at a sulfuric acid production plant in 2007 led to shortages, and due to the delayed start-up of a new plant, rationing continued until at least mid 2008. Extra supplies were being sought from Uzbekistan, and from Russia in 2008. KazAtomProm expected the supply situation to be improved by the end of 2007 but uranium production forecasts into 2008 are affected. Uranium One revised its 2008 production downwards by 1080 tU, which it says is "primarily due to the acid shortage" for its South Inkai and Kharasan projects (70% and 30% owned respectively) which were just starting up.

* 70-80 kg acid/kgU (comprising 15-20% of the operating expense), compared with Beverley in Australia at around 3 kg/kgU.

A new 1.2 million t/yr Canadian acid plant feeding from the Kazakhmys copper smelter in Balkhash started production at he end of June 2008, financed by an EBRD loan to abate sulfur dioxide emissions from copper smelting. Another new acid plant of 0.5 million t/yr capacity is being built at Zhanakorgan, next to the Kharasan mines in the Western (#6) mining group region, to serve those mines from 2010. It will burn 170,000 t/yr of solid sulfur derived from oil and gas production by Tengizhevroil and support 5000 tU/yr production. A 360,000 t/yr acid plant at the Stepnogorsk Mining and Chemical Combine started in 2006.

Uranium One is participating in a joint venture to build a US$ 100 million acid plant near Kharasan, expected to come on line in 2009.  The company has a 19% interest.  It is not clear whether this is the same project as Zhanakorgan.

The Stepnoye or Northernmining group in the Chu-Sarysu basin consists of Uvanas, East Mynkuduk, Akdala and Inkai mines, with Central and West Mynkuduk, South Inkai, Budenovskoye and Zhalpak planned. All are amenable to in-situ leaching (ISL).

Uvanas is a small deposit which commenced operation in 2006.

Inkai: Early in 2004 it was announced that the Inkai Joint Venture (JVI) would develop the Inkai mine in this part of the Chu-Sarysu basin. JVI was set up in 1995 and now Cameco holds 60% with Kazatomprom. Following a 2-year feasibility study JVI is investing US$ 38 million in an ISL operation due to start commercial production in 2008 and ramp up to 2000 tU/yr in 2010. Total cost of the JVI development is projected as US$ 200 million. Cameco reports 52,000 tU₃O₈ proven and probable reserves plus 6450 t indicated and 122,000 t inferred resources (Dec 2006). A feasibility study completed in 2008 would double the production from JVI, with the increment being split 50-50, but no schedule for this is set.

In September 2005 UrAsia Energy Ltd of Canada agreed to pay US$ 350 million for 70% of the Betpak Dala joint venture which owns the South Inkai project and the Akdala mine. South Inkai has inferred resources of 24,000 tU, Akdala has proven & probable reserves of 9500 tU and 16,000 tU indicated & inferred resources. The company (UrAsia) is now Uranium One Inc.

South Inkai mine started production in October 2007 and will ramp up to 2000 tU/yr in 2011, though 2008 production has been revised downwards to 340 tU due to acid shortages.

Akdala started up in 2006 and is expecting to produce 1000 tU/yr in 2007, at cash operating cost of $10/lb.

Central Mynkuduk mine is scheduled to start-up in 2007 with capacity of 2000 tU/yr by 2010.

West Mynkuduk: Early in 2006 KazAtomProm signed a US$ 100 million joint venture agreement with Sumitomo Corp (25%) and Kansai Electric Power Co (10%) to develop the deposit. First production from the Appak JV was in June 2008 with design capacity of 1000 t/yr expected in 2010. Sumitomo will supply uranium from the mine to Japanese power utilities.

The East Mynkuduk mine was launched in May 2006 by Kazatomprom and is expected to achieve its planned 1000 t/yr production in 2007.

The Budenovskoye mine is scheduled to start-up in 2008, ramping up to a capacity of 1000 tU/yr by 2009 and 2500 tU/yr by 2015. In July 2006 the Budenovskoye operation became a 50:50 JV with Russia, complementing Zarechnoye.

Zhalpak: Late in 2007 it was reported that a Chinese-Kazatomprom joint venture was being set up to develop the deposit. This could produce up to 1000 tU/yr from resources of 15,000 tU, starting about 2012.

 

The Central or Eastern mining group (Tsentralnoye) in the Chu-Sarysu basin comprises Moinkum, Southern Moinkum, Kanzhugan, Tortkuduk mines, plus the new refinery.

Moinkum (Muyunkum): Following three years' pilot plant operation, Areva and the state utility Kazatomprom agreed in April 2004 to set up a 1500 tU/yr in situ leach (ISL) uranium venture at Moinkum in this part of the Chu-Sarysu basin. Areva holds 51% and funded the US$ 90 million Katco joint venture, having spent some US$ 20 million already since 1996. Resources are 52,000 tU₃O₈. Operation began in June 2006, with capacity eaching almost its full 500 tU in 2007.

Tortkuduk (Moinkum North) is also part of the Katco JV and is expected to reach full production of 1000 tU/yr by the end of 2008.

A June 2008 agreement expanded the Katco joint venture from mining 1500 tU/yr to 4000 tU/yr and sets up Areva to handle all sales from it through to 2039.

 

The Western mining group (#6) is in the Syrdarya basin and comprises the North and South Karamurun mines operated by Mining Company #6, with Irkol and (North) Kharasan 1 & 2.

Kharasan: In 2005 UrAsia Energy Ltd (now Uranium One Inc) of Canada paid US$ 75 million for a 30% share of the Kyzylkum joint venture which owns the (North) Kharasan project. Kharasan has indicated & inferred resources of 41,000 tU, though Kazatomprom reports 55,000 tU as estimated reserves in October 2007. (In March 2006, NI 43-101 convention: 5300 tU indicated and 29,000 tU inferred, with potential for another 40,000 tU.)

In April 2007 several Japanese companies bought 40% of the Kharasan project and will take 2000 tU/yr when it is in full production at 5000 tU/yr about 2014. Of that share, Marubeni had 55%, Tepco 30%, Chubu 10% and Tohoku 5%. When Toshiba agreed to sell part of Westinghouse to Kazatomprom, it agreed to buy 9% of Kharasan from Marubeni (ie 22.5% of the Japanese stake). Then Kyushu Electric Power Co bought 2.5% of the Japanese stake, leaving Marubeni with 30%. Project funding is expected from the Japan Bank for International Cooperation.

Production was to commence in the first quarter of 2008 with Kharasan-1 to reach 3000 t/yr by 2010 and Kharasan-2 to reach 2000 tU/yr in 2014.  Kharasan 2008 production is forecast as 280 tU.

Irkol is expected to start up in 2008 and produce 750 tU/yr by 2010.

Karamurun: North Karamurun was expected to start up in 2007, South Karamurun in 2009.

The Southern mining group in the same Syrdarya basin has the Zarechnoye mine.

Zarechnoye is a JV with Russia , which started production at the end of 2006 and will ramp up to 500 tU/yr in 2007 and 1000 tU/yr in 2008. The US$ 60 million Zarechnoye joint venture involves Kazatomprom (49%), Tenex - now ARMZ (49% - to provide finance) and Kyrgyzstan's Kara Baltinski Mining Combine, which will process the ore there.

In June 2006 Tenex signed a US$ 1 billion uranium supply contract with Zarechnoye JV for up to 6000 tU per year from 2007 to 2022. Initially this will come from Zarechnoye mine (19,000 tU reserves) but other production centres with Russian equity are envisaged, notably Zarechnoye phase 2 and Budenovskoye.

Earlier, Itochu Corp of Japan has signed a uranium purchase agreement with KazAtomProm for some 3000 tonnes of uranium over 10 years to be marketed in Japan and the USA. KazAtomProm intends to use a US$60 million loan from Japan¹s Mizuho Corporate Bank to raise uranium production at the Central Mynkuduk deposit to 1000 tU/yr, of which Itochu Corp will receive 300t.

In May 2006 Kazatomprom announced that Irkol (750 t/yr) and Kharasan (2000 t/yr) in the Western group would start up in 2007, in addition to those mentioned above.

A 2005 KazAtomProm publication listed uranium resources in the Chu-Sarysu and Syrdarya provinces as:
Northern (Stepnoye) - 750,000 tU
Eastern (Tsentralnoye) - 140,000 tU
Western (# 6) - 180,000 tU
Southern (Zarechnoye) - 70,000 tU
this being 72% of total Kazakh U resources and all suitable for acid ISL recovery.

All uranium is exported, and with the 2006 joint venture agreements, Russia will be the main customer.

Fuel cycle

In 2006 a joint venture was set up with Russia's Tenex is for uranium enrichment at Angarsk in southern Siberia where Russia has its main conversion plant and a small enrichment plant. It will eventually be capable of enriching the whole 6000 tonnes of uranium production from Russian mining JVs in Kazakhstan.

The internationally-significant Ulba Metallurgical Plant at Ust Kamenogorsk in the east of the country was commissioned in 1949. It has a variety of functions relevant to uranium, the most basic of which since 1997 is to refine most Kazakh mine output of U₃O₈. (It also produces beryllium, niobium and tanatalum.)

In June 2008 the formation of a new company - Ulba Conversion LLP - was announced, to build a 12,000 t/yr uranium hexafluoride conversion plant here, with Cameco providing the technology and holding 49% of the project.  Ulba has produced HF since 1952, and the new conversion subsidiary will fit in with Russian JV enrichment arrangements.  Construction is expected to start in 2009.

Since 1973 Ulba has produced nuclear fuel pellets from Russian-enriched uranium which are used in Russian and Ukrainian VVER and RBMK reactors. Some of this product incorporates gadolinium and erbium burnable poisons. Other exports are to the USA and in 2007 it plans to market to Asia. It briefly produced fuel for submarines (from 1968) and satellite reactors. Since 1985 it has been able to handle reprocessed uranium.

Ulba Metallurgical Plant  is majority owned by Kazatomprom and 34% by Russia's TVEL and has major new investment under way. It has secured both ISO 9001 and ISO 14001 accreditation. In 2007 a technological assistance agreement was signed with Japan apparently in line with government announcements that it would move towards selling its uranium as fabricated fuel or at least fuel pellets rather than just raw material. (One agreement is on fabrication of nuclear fuel components, between Kazatomprom, Kansai Electric and Sumitomo Corp.)
Kazatomprom has said that it aims to supply up to one third of the world fuel fabrication market by 2030, with China to be an early major customer.  In June 2008 Areva signed a memorandum of understanding to provide engineering expertise to build a 1200 t/yr fuel fabrication plant as part of the Ulba complex, utilising fuel pellets from it.  This would be 51% owned by Kazatomprom, 49% Areva.  It will include a dedicated 400 t/yr line specifically for fuel for French reactors.

Nuclear power 

The BN-350 fast reactor at Aktau (formerly Shevchenko), on the shore of the Caspian Sea, successfully produced up to 135 MWe of electricity and 80,000 m3/day of potable water over some 27 years until it was closed down in mid 1999. About 60% of its power was used for heat and desalination. It was operated by the Mangyshlak Power Generation Co. (MAEK).

The Russian plant, built under Minatom supervision, was designed as 1000 MWt but never operated at more than 750 MWt and was most recently quoted at 520 MWt, but it established the feasibility and reliability of such cogeneration plants. (In fact, oil/gas boilers were used in conjunction with it, and total desalination capacity through ten multi-effect distillation (MED) units was 120,000 m³/day.)

Kazakh plans for nuclear power include large light-water reactors for the southern region, 300 MWe class units for the western part and smaller cogeneration units in regional cities.  There are proposals for a new nuclear power plant near Lake Balkhash in the south of the country near Almaty.

The July 2006 JV with Atomstroyexport envisages development and marketing of innovative small and medium-sized reactors, starting with OKBM's VBER-300 as baseline for Kazakh units. Russia's Atomstroyexport expects to build the initial one.

In April 2007 two agreements with Japan relate to assistance in building nuclear power plants, one between Japan Atomic Power Co and three Kazakh entities, the other between Toshiba Corp and Kazatomprom.  In June 2008 a further agreement on high-temperature gas-cooled reactor research was initialled by the Japan Atomic Energy Agency (JAEA) and the Kazakhstan Atomic Energy Committee, focused on small cogeneration plants.

The country's National Nuclear Centre (NNC) has proposed constructing 20 or more small reactors each of 50-100 MWe to supply dispersed towns, the first being at Kurchatov.

Radioactive Waste Management

The country has a major legacy of radioactive wastes from uranium mining, nuclear reactors, nuclear weapons testing, industrial activities, coal mining and oilfields.

A specific law covers radioactive waste management, and a new radioactive waste storage and disposal system is under consideration.

A US-Kazakh agreement covers management of spent high-enriched reactor fuel.

Decommissioning of the BN-350 fast reactor at Aktau is under way, with extensive international support. Spent fuel is stored at site, as is 1000 tonnes of radioactive sodium.

Semilpalatinsk hosted 470 nuclear weapons tests in the Soviet era and there remains a significant legacy of environmental damage there.

Research & Development

At Kurchatov (aka Semipalatinsk-21) on the former Semipalatinsk nuclear test site three research reactors owned by the National Nuclear Centre are operated by the Institute of Atomic Energy. A fourth is at Almaty. The three larger ones are tank-type units of 6, 10 and 60 MW, the newest is a 400 kW high-temperature gas reactor. All were supplied by Russia and use high-enriched fuel.

Organisation, Regulation and safety

The government corporation Kazatomprom was set up in 1996-7 to manage the government's stake in uranium mining and nuclear fuel production, as well as import and export of nuclear material. It also regulates uranium mining. KATEP, set up in 1993, formerly was responsible for all this but in 1997 became simply focused on nuclear power plants.

The National Nuclear Centre (NNC) was set up in 1992 to utilise the former Soviet military facilities for civilian research.

The Nuclear Technology Safety Centre was set up in 1997 with US support to manage the shut-down of the BN-350 reactor at Aktau, and foster safety of nuclear power.

The regulatory body responsible for licensing and safety as well as safeguards compliance is the Kazakhstan Committee on Atomic Energy (CAE), formerly the Atomic Energy Agency.

All uranium and nuclear operations - MAEK, Kazatomprom, KATEP, CAE and NNC, come under the Ministry of Energy & Mineral Resources. It operates under the 1997 Atomic Energy Law.

Non-proliferation

Kazakhstan is a party to the Nuclear Non-Proliferation Treaty (NPT) as a non-nuclear weapons state. Some 1300 nuclear warheads were destroyed after independence. Its safeguards agreement under the NPT came into force in 1994 and all facilities are under safeguards. In February 2004 it signed the Additional Protocol in relation to its safeguards agreements with the IAEA, and this came into force on 2007.

References:
IAEA 2002, Country Nuclear Power Profiles
IAEA 2002, Uranium 2001: Resources, Production and Demand (Red Book)
Perera, Judith 2003, Nuclear Power in the Former Soviet Union, vols 1 & 2.
Kazatomprom 2005, Uranium Mining.

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