Publication: Eurasia Daily Monitor Volume: 3 Issue: 109

Officials in Russia’s nuclear sector have long eyed Central Asia’s uranium deposits. Now Russia appears prepared to invest in the uranium-mining sector in Kazakhstan and Uzbekistan in order to supplement domestic production.

In May representatives from the Russian nuclear agency, Rosatom, and Kazakhstan’s nuclear company, Kazatomprom, held talks in Almaty. Kazatomprom head Mukhtar Jakishev and his deputy, Askar Kasarbekov, reportedly indicated that Russia sought to import up to 5,000 tons of uranium from Kazakhstan through 2012 (Kazinform, May 12).

Russia aims to launch several new joint ventures with Kazakhstan this year to both mine and process uranium ore, according to officials at Russia’s Teknosnabeksport (Interfax, May 12). The fully state-owned Teknosnabeksport already holds a 35% stake in Zarechnoye, a uranium joint venture involving Russia, Kazakhstan, and Kyrgyzstan.

In April, Teknosnabeksport head Alexei Grigoriev said cooperation with Kazakhstan and Uzbekistan was one of the “most promising” ways to develop uranium mining. “Russia was previously unable to invest in the uranium mining sectors in these countries, but now it has changed,” he said.

Grigoriev conceded that Russia’s major uranium deposit, Streltsovskoe, was near depletion, while major Soviet-era deposits remain viable in Kazakhstan and Uzbekistan. He also pledged to prioritize the Asia-Pacific region — mainly China, Korea, and Japan — in terms of Russia’s future nuclear fuel exports (RIA-Novosti, April 19).

Russia’s interest in Kazakh uranium hardly comes as a surprise, as the uranium-mining sector has been developing fast in Kazakhstan. Since 1997 Kazatomprom has upped the country’s uranium production from 795 to 3,363 tons per year. Kazatomprom’s “15,000 tons by 2010” program is expected to cost about $700 million. Kazakhstan’s uranium deposits are estimated to contain 1.5 million tons of reserves (Itar-Tass, May 12).

On May 12, Kazakhstan opened a new uranium mine at the Vostochnyy Mynkudyk deposit in South Kazakhstan. The operation has a projected annual capacity of 1,000 tons of uranium concentrate. “The new mine is part of a program to raise the uranium output to 15,000 tons by 2010,” Kazatomprom head Jakishev announced.

Subsequently, Jakishev made it known that Kazakhstan expects to complete talks with Russia and France on Kazatomprom’s share in uranium enrichment plants by late 2006 or early 2007. “We start bargaining now,” he said (Kazakhstan Today, May 23).

The Russian and Kazakh nuclear agencies currently cooperate in Ukraine. At a meeting of shareholders in the Ukrainian-Kazakh-Russian nuclear joint venture, UkrTVS, Kazatomprom and the Russian state-owned nuclear fuel producer, TVEL Corporation, reportedly pledged continued support to the fuel-producing venture. Launched in 2001, the project seeks to supply fuel to Ukrainian nuclear power stations (Kazinform, April 20).

Meanwhile, Russia is also keen to restore some version of the Soviet-era nuclear complex in Central Asia. Last April Sergei Kiriyenko, head of Rosatom, traveled to Kyrgyzstan to discuss bilateral economic cooperation. He was also understood to seek resumed production of processed uranium at the Kara-Baltin plant. That plant was virtually shut down in 2005, mainly due to the lack of uranium ore supplies from Kazakhstan.

In May, Uzbek sources indicated that the Navoi plant could launch a uranium joint venture with Russia in July 2006. The venture would mine up to 300 tons of uranium ore a year at the Aktau deposit in Uzbekistan, while Russian possible investments were estimated at $30 million (Interfax, May 3).

Russia is understood to seek Central Asian uranium for both domestic and export purposes. Russia’s nuclear industry puts a priority on the country’s energy needs and global expansion, Kiriyenko announced last month. He said that Russia must replace its aging nuclear power plants or NPPs. “In 2015-2025, existing NPPs will be coming to the end of their operational cycle and we should build new facilities to replace them,” Kiriyenko said. He added that Russia has the potential to expand into global markets, including in the construction of NPPs and supplies of nuclear fuel (RIA-Novosti, May 17).

During a visit to Washington later in May, Kiriyenko disclosed plans to build about 40 new nuclear reactor blocks by 2030. He also pledged to increase uranium mining in Russia: “We have already agreed on a tenfold increase in funding for exploration and development of uranium reserves.” Kiriyenko also said Russia faced no shortage of uranium and claimed that Russian stocks of uranium would suffice “for more than 50 years” (RIA-Novosti, May 24).

Russia’s state-controlled TVEL has indicated plans to invest about 12 billion rubles ($444 million) to raise the country’s uranium production up to 6,000-7,000 tons a year. In 2005, Russia reportedly produced 3,300 tons of uranium, or well below the country estimated annual consumption of 8,000 tons (Vedomosti, June 1).

In the meantime, the Kremlin also moved to boost state controls over the country’s nuclear sector. On May 26, Sergei Sobyanin, head of the presidential administration, was elected chairman of TVEL’s board of directors. He replaced a lower-ranking Kremlin official, Putin’s aide Sergei Prihodko, who had previously held this post (Interfax, May 26).

On June 2, TVEL acquired a minority stake in Atomstroieksport from Gazprombank, thus restoring the government’s control over the major Russian exporter of nuclear technologies. TVEL raised its stake in Atomstroieksport from 2.2% to a mere 6.2%. However, coupled with Zarubezhatomstroi’s 44%, now the two state-run agencies have a majority interest in Atomstroieksport, which has built five nuclear reactors in China, India, and Iran (Interfax, June 2).

Therefore, the Russian authorities have increased state control over the nuclear exports sector, presumably aiming at further lucrative contracts in Asia. Subsequently, Russia would need extra uranium resources to back up its ambitious Asian nuclear projects, not to mention the Iranian one.