Kazatomprom hikes outlook after higher uranium production so far this year

Kazatomprom (LSE: KAP) lifted its production guidance for the year after output increased in its first half.

The world’s top uranium producer announced on Thursday that it expects to produce between 22.5 million and 23.5 million tonnes of uranium in 2024, up from the previous guidance of 21 million to 22.5 million tonnes.

The miner boosted uranium production 6% year-on-year in the year’s first six months to 10,857 tonnes. Production on an attributable basis rose 7% to 5,797 tonnes. The miner had warned that a shortage of sulphuric acid to process ore could impact output. 

Kazatomprom and its subsidiaries saw an 18% decrease in sales in the first half of the year, totaling 7,779 tonnes. At the same time, the average price of uranium concentrate increased by 41% to US$66.22 per pound.

Metal price

Earlier this year, uranium prices soared to a 15-year high of US$104 per lb. due to tight supply and rising demand. The spot price was US$84.45 per lb. on Thursday, about where it’s been in a US$10 band below US$94 per lb. since March, according to Trading Economics. 

The company noted that average realized prices for the second quarter and the first half of 2024 were higher than in the same periods of 2023, primarily due to an increase in the uranium spot price.

“The company’s current contract portfolio pricing reflects uranium spot prices. However, some long-term contracts for 2024 include fixed pricing components and price ceilings that were set during a period of lower prices,” the company said.

Shares in Kazatomprom closed flat at US$38 in London on Thursday, valuing the company at US$9.8 billion. They’ve traded in a 52-week range of US$27.65 toUS$47.60