Publication: Monitor Volume: 3 Issue: 159

Long-running negotiations over the uranium industries in three CIS countries apparently concluded in mid-August. Should they come to fruition, the negotiated deals could have important implications for the international uranium market and electricity supplies in Central Asia, and could also have an impact on the dismantling of Russia’s nuclear stockpile.

The Saskatoon-based Cameco company, the world’s largest publicly traded uranium producer, announced on August 18 that — in cooperation with France’s state-owned Cogema company and the US-based Nukem uranium trading firm — it had concluded a major uranium purchasing arrangement with Russia’s Ministry of Atomic Energy (Minatom). Under this deal, Minatom promises to provide the Western companies with the majority of the uranium that becomes available as a result of the conversion of Russia’s highly enriched weapons-grade uranium to the low-grade enriched uranium used in nuclear power plants and other commercial applications. (Canadian Corp. News, August 18) In anticipation of these deliveries (which should last through 2006), the purchasers will provide Minatom with yearly advances of up to $100 million.

Also on August 18, Kyrgyzstan’s prime minister, Apas Jumagulov, and Kazakstan’s deputy prime minister, Umurzak Shukeyev, announced the establishment of a Kyrgyzstani-Kazahkstani joint venture to refine uranium ore into commercial-grade uranium. (Russian agencies, August 18) The joint venture, 65 percent of which will belong to the Kazakstani government and 35 percent to the Kyrgyzstani government, will ship uranium ore from mines in Kazakstan to the Karabaltinsk metallurgical complex in northern Kyrgyzstan. Up to 1,000 tons of enriched uranium are to be refined annually from this ore. However, while some of the refined uranium will fuel power plants in Kyrgyzstan and Kazakstan (both countries suffer from electricity shortages), a portion will apparently be shipped to Russia. It remains to be seen whether the Central Asian uranium will then be resold to the Western purchasers.

The successful implementation of these deals could both promote the controlled dismantling of Russia’s nuclear arsenal and foster much-needed energy-sector cooperation among the Central Asian countries. On the other hand, the large increases in enriched uranium supplies that could result from these deals could also put strong downward pressure on world uranium prices, and add fresh difficulties to the task of monitoring the location and movements of potential weapons-grade uranium.

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