As the mid-year mark arrives, Canadian uranium producer Cameco has reaffirmed its uranium delivery expectations for the year.
In contrast, Kazakh producer NAC Kazatomprom has updated its 2024 production forecast based on its half-year results.
Kazatomprom’s Production Growth
Kazatomprom’s results for the quarter and half-year reflect a production of 10,857 tU on a 100% basis (5,797 tU on an attributable basis), representing a year-on-year increase of 6% for 100% production and 7% for attributable production.
Cameco’s Production Highlights
Cameco reported a total production of 12.9 million pounds U3O8 (4,962 tU) from its Canadian operations, marking a 47% year-on-year increase.
However, the company noted that in 2023, the Key Lake mill had not yet reached its full 18 million-pound annual capacity, and Cigar Lake’s productivity was affected by a shift to a new mining zone.
Both companies acknowledged that variations in sales and delivery volumes are influenced by the timing of contractual deliveries.
Kazatomprom Adjusts Production Guidance
Kazatomprom has raised its 2024 production guidance for the full year, reflecting higher-than-expected volumes due to current production rates.
The revised guidance is 22,500-23,500 tU on a 100% basis (11,600-12,600 tU attributable), up from the previous estimate of 21,000-22,500 tU on a 100% basis (10,900-11,900 tU attributable).
Sales guidance remains unchanged, with the increased production aimed at replenishing company inventories.
Kazatomprom also noted potential challenges for 2025, including limited access to sulphuric acid and construction delays at new deposits, which could impact future production plans.
Cameco’s Operational Performance and Challenges
Cameco’s CEO, Tim Gitzel, highlighted strong operational performance in the second quarter, with financial results aligning with the company’s annual outlook.
However, the company’s overall results are still affected by purchase accounting and non-operational costs related to its 2023 Westinghouse acquisition.
Cameco’s involvement in Kazakhstan, through its Inkai joint venture with Kazatomprom, saw reduced production in the first half of 2024 due to sulphuric acid supply issues.
Gitzel noted that the joint venture is facing ongoing procurement and supply chain difficulties. The 2024 production forecast of 8.3 million pounds U3O8 (100% basis) for Inkai remains tentative and dependent on adequate sulphuric acid supply.
Ongoing Risks and Mitigation Strategies
Cameco also faces risks related to procurement, supply chain issues, transportation challenges, and inflationary pressures on production costs at JV Inkai.
Geopolitical factors continue to pose transportation risks. The company is working with Kazatomprom to utilize the Trans-Caspian International Transport Route, which avoids reliance on Russian rail lines and ports.
Despite this, Cameco warns of potential delays in Inkai deliveries if this route faces unexpected delays.
The company has established inventory, long-term purchase agreements, and loan arrangements to mitigate risks associated with production shortfalls or transport delays.
In summary, both Cameco and Kazatomprom have reported significant developments and adjustments in their uranium production strategies for the year, with ongoing challenges and proactive measures in place to address potential risks.