World’s largest uranium miner cuts 2025 production guidance
Kazatomprom, the world’s largest uranium miner, has cut its production guidance for 2025 by 5,000 tonnes due to ongoing uncertainties in sulphuric acid supply and related construction delays to new projects.
The forecast has been lowered from between 30,500 tonnes and 31,500t of uranium to between 25,000t and 26,500t but the company said it remains committed to fulfilling existing sales contracts.
“We have previously warned that if limited access to sulphuric acid continues throughout this year and should we not succeed in catching up with the construction works schedule at the newly-developed deposits in 2024, Kazatomprom’s 2025 production plan may also be affected,” the company said.
Prior warning
Analysts were quick to point out that the revised figure is higher than 2024 levels but notably below agreements that require it to produce within a specified range for the year.
“As an acid-reliant in-situ recovery (ISR) miner without domestic sulphuric acid capabilities, Kazatomprom sits at the mercy of suppliers when competition arises from other smelters,” one analyst said.
“It appears the company has misjudged both the tightness of the acid market and its bargaining leverage.”
Key reagent
Sulphuric acid is a key reagent used to leach uranium from the company’s underground deposits, with around 60% of the world’s supply currently used in fertiliser production.
Growing demand from the agricultural sector and factors such as supply chain disruptions and geopolitical uncertainty have led to domestic and regional shortages in recent years.
This demand has also affected sulphuric acid availability and pricing, with Kazatomprom experiencing a 33.6% increase in the weighted average cost of sulphuric acid during 2023.
Kazatomprom has made moves to enhance its in-house sulphuric acid production capacity by constructing a new 800,000tpa sulphuric acid plant for a total consolidated production volume of around 1.5Mt.
Supply issues
Kazatomprom first flagged acid issues hampering its operations a year ago when it warned that 2024 output would undershoot its targeted capacity, which was already a 10% reduction from the maximum.
Back then, it singled out challenges related to the availability of sulphuric acid and construction delays at newly-developed deposits as the main reason for the significant change in forecast numbers.
“While all uranium-mining entities are supplied with acid volumes equally proportioned to their requirements (to minimise the risk of harm to the uranium mining process and geological structure of the deposit), the same amount of undersupply of sulphuric acid to different blocks can have varying effects on production rates,” the company said at the time.
Kazatomprom produced just under 55 million pounds of uranium in 2022 and currently supplies 40% of global uranium output.
The company has the largest reserves base in the industry and operates 26 deposits in Kazakhstan, all of which extract uranium using ISR technology.
Inventory levels
Kazatomprom said it has a “comfortable level of inventories” to meet existing contractual obligations in 2025 and has reserved a segment of its annual production as uncommitted.
“This strategic approach enables us to capitalise on emerging opportunities and adapt to fluctuations in the market landscape,” it said.
“It allows us to mitigate risks effectively and uphold our contractual obligations to clients, even amid production-related challenges.”
No decision has been made regarding mine development activity and production volumes for 2026 and beyond.