Kazatomprom, the world’s largest uranium producer, has raised its production guidance for the year after reporting a significant increase in output during the first half of 2024. The company now expects to produce between 22.5 million and 23.5 million tonnes of uranium, an increase from the previous guidance of 21 million to 22.5 million tonnes.
In the first half of 2024, Kazatomprom boosted its uranium production by 6% year-on-year, reaching a total of 10,857 tonnes. On an attributable basis, production rose by 7% to 5,797 tonnes. This growth reflects Kazatomprom’s continued efforts to meet the rising global demand for uranium.
Despite the increase in production, Kazatomprom and its subsidiaries experienced an 18% decrease in sales during the first half of the year, totaling 7,779 tonnes. However, the company saw a significant increase in the average price of uranium concentrate, which rose by 41% to $66.22 per pound.
Earlier this year, uranium prices soared to a 15-year high of $104 per pound due to tight supply and rising demand. This surge in prices has been a boon for Kazatomprom, which noted that the average realized prices for the second quarter and the first half of 2024 were higher than in the same periods of 2023. This increase was primarily driven by the rise in the uranium spot price.
Kazatomprom’s current contract portfolio pricing reflects these higher uranium spot prices. However, some long-term contracts for 2024 include fixed pricing components and price ceilings that were set during a period of lower prices. This mixed pricing structure has allowed Kazatomprom to benefit from the recent price increases while maintaining stability in its long-term contracts.
Kazatomprom’s CEO emphasized the importance of adapting to market conditions to ensure sustainable growth. The company’s ability to adjust its production targets and respond to price fluctuations demonstrates its resilience and market leadership.
The improved production figures and higher prices have positively impacted Kazatomprom’s financial performance. The company reported robust earnings for the first half of the year, driven by increased production and higher average realized prices. This financial strength positions Kazatomprom well for continued investment in its operations and further growth.
