- Uranium supplier, Cameco Corporporation (TSX:CCO), is expecting a significant reduction in uranium from its joint operation in Kazakhstan
- The company operates an in-situ recovery uranium mine in southern Kazakhstan, through a joint venture with JSC National Atomic Company
- However, JSC will be reducing operations at all of its uranium mines for the next three months, due to concerns surrounding the COVID-19 pandemic
- Cameco has previously expected to source up to 4.9 million pounds of uranium through JSC but now thinks this figure could drop by up to 600,000 pounds
- Cameco Corporation (CCO) is up 0.64 per cent, with shares trading for C$12.61 and a market cap of $4.99 billion
Uranium supplier, Cameco Corporation (TSX:CCO), is expecting a significant hit to its supply chain in Kazakhstan.
Cameco operates a joint venture with JSC National Atomic Company, which owns a uranium mine in southern Kazakhstan.
JSC is a nationally-owned operator of a series of uranium mines across Kazakhstan.
JSC announced today it will be reducing operations at all of its uranium mines for the next three months, due to concerns surrounding the COVID-19 pandemic.
This is expected to translate to a 17.5 per cent dip in the country’s uranium output. This is likely be a significant hit to the global supply of uranium. In 2019, Kazakhstan accounted for 42 per cent of the world’s uranium production.
This move will impact Cameco directly through the joint venture, Inkai LLP, which has also been impacted by this operational reduction. Cameco sources its uranium from JSC through the joint venture and is accordingly expecting a reduction in supply.
Cameco has previously expected to source up to 4.9 million pounds of uranium from JSC but now thinks this figure could drop by up to 600,000 pounds.
However, Cameco does not appear to have revoked its 2020 guidance entirely.
The company stated that it is still too early to determine the ongoing impact this will have on its operations and the market as a whole.
Uranium prices have been trending down over the last decade, with little significant changes. Whether this reduction in global supply will materially impact the slumped price is yet to be seen.
Cameco Corporation (CCO) is up 0.64 per cent, with shares trading for C$12.61 at 3:36am EST.