Rosatom to Build Kazakhstan’s First Nuclear Power Plant (Part Two)

(Part One)

Executive Summary:

• Kazakhstan has awarded leadership of an international consortium to construct the country’s first nuclear power plant to Russian state-owned nuclear corporation Rosatom.
• At the same time, Astana is courting Chinese nuclear, uranium, and water infrastructure companies to counterbalance Russia’s role.
• Kazakhstan’s short-term attempts to navigate Russian and Chinese involvement in the country’s critical infrastructure and energy sectors may conversely contribute to its geopolitical isolation in the long run.

On June 14, following almost two and a half years of deliberations and postponements, Kazakhstan granted Russia’s state-owned nuclear corporation Rosatom the right to lead an international consortium of countries that will build Kazakhstan’s first nuclear power plant (NPP) since Soviet times (Nur.kz, June 14; RBC, June 16; see EDM, July 15). Details of the companies that will be involved in the consortium have not been made public. Kazakhstan’s decision was surprising to local experts, as some unofficial opinion polls had favored Chinese, French, or South Korean contractors (Business Online, June 8; ORDA, June 16).  Kazakhstan’s deliberations on the choice of the NPP provider have indicated that the decision will be based less on economic advantages or the vendor’s merit, but rather on more geopolitical calculations (Central Asia-Caucasus Analyst, December 4, 2024).

Russia, and particularly Rosatom, has engaged in an aggressive campaign since Kazakhstan’s nationwide referendum in favor of constructing an NPP aimed at persuading Kazakhstan to make the “correct” choice (KazTAG, October 16, 2024). In January, the head of Rosatom, Alexei Likhachev, stated that the corporation was ready to construct Kazakhstan’s first NPP and claimed that both parties were heading toward “jointly-made decisions” (TASS, January 30). In early April, Russian Foreign Minister Sergei Lavrov visited Kazakhstan, specifically highlighting that Russia had become the leading investor in the country, largely due to the “Western retreat” (Russian Foreign Ministry, April 10; Radio Azattyq, April 11). On April 19, Kazakh President Kassym-Jomart Tokayev met with Russian Minister of Energy Sergey Tsivilyov, who arrived at the meeting with a “personal message” from Russian President Vladimir Putin. This gesture was most likely related to the “cooperation in the energy sector, which remains one of the central pillars in bilateral cooperation between Russia and Kazakhstan” (President of Kazakhstan, April 19). In May, Putin met with Kazakhstan’s first president, Nursultan Nazarbayev, at the Kremlin—a gesture interpreted by many experts as a stern warning to Tokayev in the wake of the NPP decision (President of Russia, May 29; Radio Azattyq, May 31). Between 2022 and 2023, Nazarbayev lost most of his official titles in Kazakhstan and was effectively removed from the country, further reinforcing suspicions that his recent meeting with Putin was intended as a signal to Tokayev, as he is unable to hold official meetings on behalf of Kazakhstan.

The Kremlin has used geopolitical pressure and coercive tactics against Kazakhstan on many occasions. Among the most notable episodes was in 2022 when a “mysterious” explosion occurred at the Tengiz oil field—the largest in the country—shortly after Tokayev and EU officials discussed the possibility of increasing Kazakh oil exports to compensate for reduced Russian supplies (ORDA, July 6, 2022). A day earlier, a district court in the Russian city of Novorossiysk banned oil supplies, mainly from Kazakhstan, via the local terminal on the pretext of the need to “mend [unnamed] technical violations and environmental transgressions” (Interfax, July 5, 2022). 

Astana is attempting to attract Chinese nuclear companies to Kazakhstan in an effort to balance pressure from Russia and its expanding role in the country’s nuclear sector. This trend is also visible across Central Asia, as Rosatom is to build NPPs in Uzbekistan and Kyrgyzstan (Economist.kg, May 29, 2023; Gazeta.uz, June 20). This is the primary reason for Astana’s formal declaration that Rosatom will serve as the lead in the international consortium, rather than the sole supplier, in the construction of the NPP. Tokayev has noted that Kazakhstan needs to have not one, but three NPPs to avoid an energy deficit in the foreseeable future (Informburo.kz, June 20). This implies that there would be space for several vendors in the future.

Following the official announcement, Kazakh Minister of Energy Almasadam Sätqaliev essentially confirmed that the China National Nuclear Corporation (CNNC) would lead a separate, future international consortium to build “another” NPP in Kazakhstan (Tengri News, June 14). To reassure the Chinese side about Kazakhstan’s commitment to this promise, in June, Tokayev explained to President of the People’s Republic of China (PRC) Xi Jinping that Kazakhstan needs two to three NPPs and that “CNNC is viewed as a reliable strategic partner who is guaranteed its niche in [Kazakhstan’s] market” (Stan Radar, June 19).

Beyond nuclear energy, Kazakhstan is pursuing integration with the PRC in water management and uranium production, both areas that play a strategic economic role for the country. The China Energy International Group is expected to assume the key role in Kazakhstan’s management of water resources and even potentially design and construct a hydroelectric power plant in the country (Vlast, July 4, 2024). The PRC is also rapidly strengthening its role in Kazakhstan’s uranium industry as Kazakhstan remains the world’s leading uranium producer (World Nuclear Association, June 19). In December 2024, Rosatom-affiliated Uranium One Group sold nearly 50 percent of its share in the Zarechnoye uranium mining joint venture to a subsidiary of the State Nuclear Uranium Resources Development Co., Ltd. (SNURDC), the Chinese firm SNURDC Astana Mining Company Limited (Interfax, December 17, 2024; World Nuclear News, December 20, 2024). In January, Uranium One Group concluded a second agreement to transfer 30 percent of its stake in uranium mining sites located in Northern Kazakhstan (Northern Khorasan) to SNURDC Astana Mining Company Limited (Atomic Energy 2.0, January 30).

While no specific details of the deal have been publicly announced, one could speculate that this arrangement may be part of a broader agreement between Russia and the PRC regarding their respective areas of involvement in Kazakhstan’s most lucrative economic sectors. Additionally, Russia’s move could be related to an attempt to circumvent Western economic sanctions. With PRC ownership, uranium produced from these deposits could be exported from Kazakhstan to other countries, including the United States, as if a Chinese company had extracted it for enrichment. This would mean that Rosatom, through its subsidiary, could continue operations, effectively allowing Russia to continue exporting uranium—although with a lower profit margin—through Kazakhstan.

These developments highlight two key trends. First, Kazakhstan has been able to maintain a relative balance between Russia and the PRC, as well as their respective interests, by allocating projects in the country’s strategic economic sectors. Second, the emerging duopoly—with the PRC and Russia playing key roles in strategic sectors of the local economy—jeopardizes Kazakhstan’s ability to diversify its foreign economic and political ties, including partnerships with the European Union and the United States. While pragmatic in the short term, Astana’s strategy of balancing between Beijing and Moscow may risk leading to long-term geopolitical isolation.