On July 3, Russian President Vladimir Putin and Chinese leader Xi Jinping attended the annual summit of the Shanghai Cooperation Organization, a Eurasian security and defense partnership, in Astana, the capital of Kazakhstan. In a statement ahead of his meeting with Kassym-Jomart Tokayev, the president of Kazakhstan, Xi stressed the need for the two countries to strengthen their cooperation in energy investment and mining. This suggests an area where the “boundless” friendship between Russia and China is being put to the test as both court Kazakhstan.
The war in Ukraine exposed Europe’s dependence on Russian oil and gas, giving a boost to nuclear energy advocates and increasing demand for uranium, the mineral used for nuclear fuel. Global uranium production is projected to top 75,000 tonnes by 2030, up from 65,000 tonnes last year. Uranium prices have increased fivefold since 2016, driven largely by rising demand from China (though they have cooled somewhat recently).
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Kazakhstan stands to benefit. It is the world’s largest producer and exporter of mined uranium, accounting for 43% of global supply in 2022. That share is nearly triple that of Canada, the next-largest producer. To maintain its position, the country has been rapidly expanding its production capacity, from 796 tons a year in 1997 to a projected 31,000 tons by 2025. The country now provides 25% of U.S. uranium imports.
Its largest customer is China, which accounts for about half of Kazakhstan’s exports, supplying about two-thirds of the uranium China consumes. The state-owned China National Uranium Corporation has signed several joint mining agreements with local operators, giving it rights to nearly 60% of future uranium production in Kazakhstan. The two countries are also negotiating the development of a uranium transport link to Shanghai.
Other countries are likely to step up their fight for Kazakhstan’s resources. Russia is trying to consolidate its influence by winning a tender to build a nuclear power plant there (the government will hold a referendum on whether to build the plant, which is unlikely to be free or fair). Most of Kazakhstan’s oil exports have to pass through a pipeline that ends in Russia and are shipped from a Russian port. Russia already controls 25% of the country’s uranium production.
However, a US ban on Russian-enriched uranium is soon to come into effect, which may prompt the West to come up with more ways to import uranium mined directly from Kazakhstan, or more exports could go through China instead of Russia, and as prices persist, other countries may start producing more as well.
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