On July 14, 2007, National Atomic Company “Kazatomprom” is 10 years of age. During this period of time the Company having been on the wane, having passed through many hardships and having saved and set up new processable and high-tech production operations managed to be financially solid and reliable, achieved new, high management standards raising the international rating and status of the company and the entire country.   

The problems faced at the time of establishment:

At the time of creation of Kazatomprom in July, 1997, the enterprises forming part of the Company were in hard financial and economic conditions. As of the end of 1998 the main problems were: loss of traditional market outlets resulting in reduction of products output due to which cost of production was increased almost twofold; there was moral and physical deterioration of capital stock, 6-months wage arrears consisting 898 million tenge ($11,9 mln.); debts to banks and foreign companies exceeded  $44 mln., crippling terms of bank lending were concluded - 29% per annum in US dollars and pledge of all property, tax and extra-budgetary funds liabilities were about 3 billion tenge.

In connection with antidumping process sales of kazakhstani uranium to the United States were prohibited, quota system was applied in Europe.  Russian orders for nuclear reactor pellets were at stake of cutback due to slump of rouble as Kazatomprom’s offered services pegged in dollar equivalent were about three times expensive of the similar services of Russian enterprises, while only 25% of orders volume was paid by money and the rest by bills of exchange with market price consisting not more than third of nominal value. The beryllium and tantalum industries were practically inoperative. There was an outflow of qualified personnel.

Ways of solution:

The senior management of Kazatomprom developed an anti-recessionary program. Ramping up the production volumes up to optimal utilization of production capacities was defined as the main priority. This was the only way of cardinal cost saving that would allow fast attaining of economy with fixed costs. In addition to outputs recovery the internal self-accounting system, scheduling network operation, tender procurement mechanism was introduced. The program was also provided for improvement of products quality, renewal of lost contacts, expansion of market outlets, introduction of new technologies, specialization of production sectors, significant renovation of worn-down production assets, radical change of staff remuneration and incentive system for showed initiative and economy of resources.

As a result Kazatomprom for the period of 3 years moved from the 13th place to the 6th place in worldwide uranium output. In the course of negotiations with Euratom representatives the necessity of lifting the quotes for Kazakhstan uranium at European market was ascertained. In 1999 Kazakhstan won antidumping process in the United States. Accordingly there were no more any restrictions regarding the world trade with natural uranium of Kazakhstan origin. The geography of natural uranium export has being expanded.

The same year against the background of global financial crisis the Company succeeded in opening of the first facility at WestLB German bank. This made it possible to restructure Kazatomprom’s credit portfolio, repay debts to all Kazakhstan banks, obtain interest rate decline in 2,2 times.   All assets pledged were redeemed. The smooth and orderly financing of production was achieved.  

At the end of 1999, tantalum production at Ulba Plant was renewed after return of “Finconcord” company from lease.

The program for increase of uranium production output at the operating mines and launch of the new mines started in 2000.

One of the most important achievements of Kazatomprom was keeping and restoration of advanced high technology productions possessed by Ulba Plant.  A long-term contract for production of fuel pellets was concluded with Minatom of Russia; joint Ukrainian-Kazakh-Russian JV was formed to provide Ukrainian nuclear reactors with fuel, that allowed production of nuclear fuel for Russian design reactors to survive.

Technology for production of uranium-erbium and uranium-gadolinium fuel pellets with burnable absorber was developed and introduced under their own steam, which allowed Kazatomprom to obtain additional orders for pellets.

At Ulba Metallurgical Plant, site for front-end fuel cycle scraps was created. In 2000, Ulba Plant became official certified supplier of uranium dioxide powders of ceramic grade for General Electric (USA).

Thanks to the developed technologies, beryllium production was totally conversed to production of peaceful products; the technology of production of copper-beryllium alloy by carbothermal method was developed. Long-term contracts with American company “Brush Wellman” and Japanese company "Marubeni" were concluded.

Within two years, from 1999 to 2000, due to scientific breakthrough of Kazatomprom specialists, the Company managed to overcome 20-years lag in technologies and launch tantalum production. It was developed the program of production reorganization focusing on production of modern high-technology tantalum condensing powders and niobium products.

In 2000, first from the date of Kazatomprom establishment, net profit was gained following the year results notwithstanding that in December 2000, the uranium price was the lowest in the uranium market.   

The Company proceeded to invest substantial capital into renovation and expansion of production – 5 billion tenge.

The Company employees Salary was increased by 25%. Payments to budget and extra-budgetary funds were increased by 60%.

2001-2002 – stabilization of the Company, forecast of the uranium market situation

The period from 2001 to 2002 may be marked for Kazatomprom as a post-crisis period. At that stage, the crisis was successfully overcome, financial stability was achieved and the Company approached the international markets.  In 2001, the Company entered the uranium market of China for the first time, and in 2002 – the market of Korea.

At that period, at Ulba Plant hydrometallurgical processing was restored, production of ceramic items from beryllium oxide was resumed, production of new type of products - beryllium copper blanks, was created.

In 2001 in Toronto at World Nuclear Fuel Market Conference Kazatomprom basing on its own forecast stated the forthcoming shortage of natural uranium.

Increase in output volumes has started in Kazakhstan. The first output was produced in 2001 by new mines of in-situ leaching – Yuzhny Moinkum and Akdala.

As early as by 2002 Kazatomprom reached the 5th place in the world in production of natural uranium compared with 13th place in 1997.

Exactly in 2002 spot pattern of ore deposits development was used for the first time.

“Volkovgeology” JSC proceeded to realize program for increase of population of drilling rigs and introduction of new technologies for construction of wells. Thanks to this program, the population of drilling rigs has been increased from 17 in 2003 to 63 in 2007.

In 2002, Geotechnology enterprise was formed for professional training and skills maintenance of the staff for uranium production enterprises of Kazakhstan.

2003-2006 – New horizons of Kazatomprom development 

Having examined the world needs in competitive nuclear fuel, Kazatomprom started development of strategic program for increase of uranium production in 2003.

The same year a long-term contract with China for supply of natural uranium was entered into.

In 2003 the Company reached the second place in the world in production of beryllium supervising 29% of the total production, and reached fourth place in the world in tantalum industry. In 2003 the Government of the Republic entrusted Kazatomprom to get out of crisis Mangistau nuclear power complex – the largest diversified power engineering enterprise being the only source of electric power, heating energy and drinking water supply for all consumers in Mangistau region. Kazatomprom breathed new life into this complex. Today after implementation of antirecessionary programs it is functioning already full-fledged and stable. 

Today at MAEK-Kazatomprom:

- personnel outflow is stopped;

- wage increase  a sequence higher;

- increase of consumers’ collectability for the services provided by the enterprise;

- distribution losses are reduced;

- technical state of the complex is renewed;

- non-distributed losses are reduced;

- tariffs are twice reduced;

- available capacities are increased.

In September of 2004 in London at the annual symposium of the World Nuclear Association Kazatomprom declared new large-scale program – “15 thousand tons of uranium by 2010”.

Key points of the program:

1. Modernization and expansion of the existing mining and production of uranium fuel.

2. Construction and putting into operation of new mines.

3. Infrastructure construction and improvement: electric power transmission lines, automobile and rail roads.

4. Organization of financing:

Within frameworks of 15000 tons program realization:

In 2004 the startup of industrial production at the uranium mine of “Katco” joint enterprise in Yuzhny Moinkum site has taken place. A refinery under Taukent mining and chemical enterprise was commissioned using technology of direct extraction of uranium from eluates.

Moreover, in connection with increase of uranium production and social development required for solution of the strategic tasks of attracting and keeping qualified specialists at city-forming enterprises, the first stage of Kazatomprom restructuring was implemented in 2004. All production functions for uranium mining were transferred to a newly formed company – “Mining Company” LLP, while rendering social services – to “Kazatomprom- Demeu” LLP.

In 2004, the Stepnogorsk Mining & Chemical Complex (SMCC) was transferred under management of Kazatomprom. By that time, the complex was not operational. Just in a year, in 2005, SMCC production operations were stabilized, the plan for U3O8 production from its own raw materials was fulfilled, and 503 tons of uranium was produced.

In 2004, “Ulba-China” subsidiary was established in a free economic zone of China to sell beryllium products;

In 2005, the peroxide technology to produce U3O8 was developed to improve the finished product quality.

In 2005 cooperation with French company “AREVA” was expanded in many aspects of joint activities in the field of nuclear fuel cycle. 

In 2005, Kazatomprom launched a new concept of the mine management. Full automation of all mining operating procedures was taken place, and it resulted in substantial reduction of the mine personnel. Further, a decision was made to implement the second stage of Kazatomprom restructuring. Personnel of auxiliary and maintenance production facilities was separated from the mines, and integrated service centers for technical maintenance of the mines were formed where main profiled specialists were concentrated.

Service Centers provide:

• geological and geophysical support of the drilling and mining operations;
• power engineering maintenance;
• communications and security;
• transport service;
• chemical analysis and metrological service;
• repair and construction/installation work;
• accounting and financial statements;
• public amenities for the mines

Before modernization, five hundred persons were employed by one mine. Due to restructuring and automation of the process, the number of employees per mine reduced to one hundred people. Such measures improved mining operations and increased 5-fold the labor productivity.

Under the program of intensive uranium production, Kazatomprom actively expands available infrastructure.

More than 300 km of motor road was reconstructed and more than 400 km of road was built and put into commission by 2005. A three hundred meters bridge over the Syr-Darya River is presently under construction. Construction of new railway roads has been started.

260 km of high-voltage power lines was constructed in Shu-Sarysu and Syrdarya provinces. This will provide regular power supply to new mines.

After ten years of shutdown, in 2006, a sulfuric acid plant in Stepnogorsk was put into operation to provide mines with the main reagent.

Vostochny Mynkuduk mine with the capacity of 1000 tons was launched in 2006 under the program of uranium production development. Also, Yuzhnyi Moinkum in-situ leaching mine of the Kazakh-French JV KATKO was put into commercial operation.

In 2005, the syndicated loan in the amount of 150 million US dollars for the period of three years was secured from eleven European banks. In addition, a loan of 60 million US dollars was procured by Japanese Mizuho Bank for the period of ten years.

In 2006, Fitch Ratings first assigned «ВВ+» long-term foreign currency issuer rating and “B” short-term foreign currency issuer rating to the National Atomic Company “Kazatomprom”, with the rating forecast as “Positive”. The same year, Moody's Investors Service assigned to Kazatomprom Baa3 foreign currency issuer rating, with the rating forecast as “Stable”. The ratings assigned by the international rating agencies prove Kazatomprom’s reasonable ability to be liable for its financial obligations and provide it with a broad access to international financial markets to secure loans with lower costs.

In 2007 NEXI insurance company opened to Kazatomprom an insurance credit facility of US$ 300 million. It means that NEXI provides insurance for any Kazatomprom’s transactions without examining such transactions.

In 2006, cooperation between Kazakhstan and Russia reached a new level. Zarechnoye uranium production facility was put into commercial operation. A comprehensive program for Russian-Kazakh cooperation in the field of nuclear energy peaceful use was developed and approved. Under this program, Akbastau uranium production joint venture, Uranium Enrichment Center JV and Nuclear Power Plants JV for WBR (ВБР) 300 reactor design were established.

Also Karatau JV uranium production facility was put into commercial operation in 2006.

Cooperation with Japanese companies in various fields of nuclear fuel cycle was expanded. The first delivery of uranium to the Japanese market was made. Appak JV was established. The agreements reached with Japanese partners would make it possible for Kazakhstan to enter the Japanese market with uranium hi-tech products in the nearest future.

Also cooperation with Chinese companies has been strengthened.  A number of agreements on joint work in different spheres of nuclear energy have been signed.

In 2006, an agreement with a Chinese partner was reached, and the agreement for setting up a Kazakhstani-Chinese JV to produce copper beryllium mill products was signed. 

In 2006, a molybdenum concentration plant was built in the territory of Stepnogorsk Mining & Chemical Complex. The designed capacity is 500 thousand tons of molybdenum ore per year.

In 2006, the scientific research related to the production technology of construction materials for thermal reactor under ITER project was launched.

In 2006, the scientific research related to the production technology of thermal reactor’s first wall construction materials under ITER project was launched. This wall is intended to keep the plasma temperature at about 100 million Celsius degree;

2007 – New Frontiers of the Company’s Development

National Atomic Company “Kazatomprom” and major Japanese companies engaged in power energy, trade and financing held number of negotiations and signed 24 agreements for cooperation in the field of nuclear power energy.

Kazatomprom and Cameco Corporation signed Protocol of Intent for construction of conversion facility on the territory of the Republic of Kazakhstan.

In 2007 NEXI insurance company opened to Kazatomprom an insurance trade investment line for a 10-year term. Opening of a credit facility line for a partner, moreover a foreign partner, became the first and by now a unique investment activity of an insurance Japanese company.

As for China, Kazatomprom and Guangdong Nuclear Power Corporation (China Guangdong Nuclear Power Holding, CGNPC) entered into the Contract for Development and Strengthening of Strategic Cooperation in the sphere of nuclear fuel production for NPP of China and supply of recourses for developing nuclear power sector of China. The main idea of this Contract is that Kazatomprom shall become the main supplier of Guangdong Corporation. And Guangdong Corporation means 50 per cent of reactors to be built in China.

Within the framework of the Strategy for Industrial-Innovation Development of the Republic of Kazakhstan Kazatomprom shall carry out target investment and scientific-technical programs, stimulate investment and innovation activity for creation of high-tech and export-oriented production.

Today Kazatomprom successfully fulfills its strategy on becoming the vertically integrated atomic company with all stages of nuclear fuel cycle. And in several nearest years the company shall bring on the world market production of high technological content with maximum added value. Also, according to the republican program called “30 break-through projects” National Atomic Company Kazatomprom prepared about 30 break-through projects of universal importance, which are planned to be realized in recent years.

List of break-through projects: