Kazakhstan's Uranium Resources: A Hot Choice Amid U.S. Sanctions on Russian Nuclear Fuel

Key Chapter Titles

1. Western Dependence on Russia
2. The Issues with Russian Uranium Enrichment
3. Kazakhstan: A Viable Alternative?
4. Kazakhstan's Other Partner (China)
5. Follow-up Actions Between the U.S. and Kazakhstan in the Uranium Resource Sector
6. Distribution of Russian Nuclear Fuel Export Destinations (2015-2023)
7. Uranium Resource Reserves by Country in 2021
8. Global Uranium Mine Production in 2022
9. Uranium Enrichment Capacity by Country in 2022
10. Equity Structure of Kazakhstan's Uranium Mines

Document Introduction

In an era of intensifying great power competition and increasingly conflicting climate goals and geopolitical interests, the United States is committed to reviving nuclear power while planning to ban imports of enriched uranium from Russia, a major global nuclear fuel supplier. This decision stems from a belated U.S. realization that its annual $1 billion payment to Russia for enriched uranium effectively funds Putin's war efforts. However, this ban could also hinder the U.S. goal of tripling its nuclear power capacity by 2050. Although both houses of the U.S. Congress have passed relevant restrictive legislation, its policymakers have not yet secured sufficient alternative sources of enriched uranium, and domestic expansion plans will still take years to materialize.

As the world's largest uranium producer, Kazakhstan theoretically possesses the potential to help the U.S. replace Russian nuclear fuel imports. The country holds 13% of global uranium reserves, accounted for 43% of global supply in 2022, and its uranium deposits have geological advantages allowing for low-cost, low-impact in-situ leaching extraction. However, Washington still views Kazakhstan through an outdated lens, overlooking its recent gains in economic sovereignty and the strategic development of its uranium industry—Kazakhstan is actively seeking new partners to balance traditional relationships and has only once allowed Russian and Chinese companies to obtain controlling stakes in local uranium mines.

The report provides an in-depth analysis of the current state of Western dependence on Russian nuclear fuel: the United States is the largest buyer of Russian enriched uranium, relying on Russian imports for nearly 25% of its nuclear fuel consumption, with related purchases exceeding $1 billion in 2023. Despite the planned U.S. ban, Russia controls nearly 50% of global uranium enrichment capacity, and there are numerous bottlenecks in the nuclear fuel supply chain. Without alternatives, the ban could cause nuclear fuel prices to surge by 13%, even jeopardizing the operation of America's 93 nuclear reactors. Simultaneously, Russia could retaliate with a unilateral export ban, rendering the U.S. Department of Energy's waiver authority ineffective.

The development of Kazakhstan's uranium industry faces multiple opportunities and challenges. Currently, its uranium exports primarily rely on Russian and Chinese enrichment facilities and transportation routes. To connect with the U.S. market, it needs to reconfigure logistics channels, with the "Middle Corridor" multimodal transport route becoming key. Furthermore, Russia increased its ownership share in Kazakh uranium mines to approximately 26% by acquiring a 49% stake in Kazakhstan's Budyonnovskoye uranium mine, a transaction highlighting the complex ties between Kazakhstan and Russia in the uranium sector. At the same time, Kazakhstan is also a major supplier of nuclear fuel to China, with Chinese companies holding potential rights to up to 60% of Kazakhstan's future uranium mining rights.

The report points out that there is precedent for U.S.-Kazakh cooperation in the uranium field, such as jointly advancing the Kazakhstan research reactor fuel conversion project and the International Atomic Energy Agency nuclear fuel bank construction in the 2010s. In the future, the U.S. needs to expand domestic enrichment capacity and support "Middle Corridor" infrastructure development. Kazakhstan, with external investment and technology, can upgrade towards higher value-added segments of the nuclear fuel supply chain like conversion and enrichment. If both sides can overcome geopolitical biases and build a mutually beneficial partnership, it could not only help the U.S. break free from dependence on Russian nuclear fuel but also assist Kazakhstan in enhancing its economic autonomy and achieving a diversified restructuring of the global nuclear fuel supply chain.