TSX-listed Cameco will be in discussions with uranium major Kazatomprom – its joint venture (JV) partner at the Inkai mine – to determine how that company’s announcement of reduced operational activities across its mines will impact on Cameco’s purchases.
Kazatomprom’s decision could reduce Inkai’s 2020 production by up to 12%, which Cameco said on Tuesday translated into a reduction in its 2020 purchases from the JV of up to 600 000 lb of U3O8. Prior to the announcement, Cameco expected to purchase 4.9-million pounds of U3O8 in 2020.
“We will continue to assess the situation and will provide an update when we can better ascertain what the implications of this decision and other impacts on our business related to Covid-19 might be for this year’s outlook,” the Canadian major noted.
The Inkai operation is an in-situ recovery uranium mine in southern Kazakhstan that is owned and operated by JV Inkai, which, in turn, is owned by Cameco (40%) and Kazatomprom (60%).
Kazatomprom announced on Tuesday that it was reducing operational activities across all its uranium mines for an expected period of three months, citing the risks posed by the coronavirus pandemic.
According to Kazatomprom, this decision would result in a lower level of wellfield development activity and, as a result, an estimated reduction of up to 17.5% in total planned uranium production in Kazakhstan for 2020. In 2019, Kazakhstan accounted for more than 42% of the world’s uranium production.