Uranium, the geopolitical stakes of the conflict in Kazakhstan

Uranium, the geopolitical stakes of the conflict in Kazakhstan

Social unrest in Kazakhstan can lead to higher prices or problems in the supply of uranium from nuclear raw materials. It is one of the reasons why the Kremlin is following developments in the former Soviet republic with more interest than usual.

Kazakhstan’s mines account for 12 percent of the world’s uranium reserves. In 2019, the country, which has been the main producer for years, accounted for 43 percent of the total nuclear feedstock production. The government controls its grip on the uranium sector through the Kazatomprom Corporation, three-quarters of which is owned by the state. The remaining quarter is freely tradable, including on the London Stock Exchange.

uranium

Kazatomprom, and thus the Kazakh government, helps set international uranium prices. For example, the state-owned company, like its peers, has scaled back uranium production in recent years to support prices.

Global uranium prices rose about 8 percent on Wednesday in the first reaction to the unrest. The share of Kazatomprom fell sharply on the London Stock Exchange, recovering on Friday after soothing language from Kazakhstan. A Kazatomprom spokesperson said production would not be affected by the disturbances, which mainly occur in cities and away from the mines.

Fear of logistics tripping

He stressed that international deliveries can continue as usual. But communication networks, including the Internet and phone lines, are still severely disrupted. This worries analysts. “The disruption has little impact on production, but telecommunications disruptions can disrupt the logistics chain,” credit rating agency Standard & Poor’s wrote in a preliminary analysis.

Nuclear power plants also have large reserves of uranium, precisely to anticipate unexpected events such as what is happening in Kazakhstan.

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geopolitical interests

So it is not surprising that Russia sends soldiers to its neighboring country to help the government. Kazakhstan is not only important for uranium, but is also a major oil producer. Former President Nursultan Nazarbayev, Kazakhstan’s strongman for decades, is a staunch ally of Russian President Vladimir Putin.

Nazarbayev, now 81, resigned in 2019 and chose his close friend Kassym-Jomart Tokayev as his successor. It is unclear if their relationship is still as good as before.

What is certain is that the Kremlin wants to maintain or perhaps expand its influence on Kazakhstan policy. Because the United States also wants more influence. There is no doubt that Putin will do everything in his power to obstruct the Americans.

Presidents Tokayev (Kazakhstan) and Putin (Russia) at the regional summit in Saint Petersburg, December 28 – Izobeks

(LL)

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