Press Release on Signing of Agreements for Strategic Partnership Between Kazatomprom, CNNC and CGNPC

06.11.2008
October 31, 2008, saw the historic signing of agreements for a strategic partnership between Kazatomprom and the Chinese nuclear power corporations - China National Nuclear Corp (CNNC) and China Guangdong Nuclear Power Co (CGNPC) – take place in Astana. The agreements include long-term supplies of natural uranium for the requirements of the nuclear power industry in China, development of uranium deposits on the territory of Kazakhstan (jointly with Chinese partners), fabrication of fuel for Chinese NPPs and new lines of activity, i.e. construction of NPPs in China. “Thus Kazatomprom will be engaged in a totally new and promising type of activity – the construction of nuclear power plants”, Kazatomprom President Mr. M. Dzhakishev told an Almaty press conference on the 6th of November. One of the key terms of the agreements is not just the participation in NNP construction but also the fuel supplying of these NPPs. Kazatomprom is the first company to gain access to the closed fuel market of China”, Mr. Dzhakishev stressed. In turn, the Chinese Guangdong Nuclear Power Corporation (CGNPC) will have participatory interests in joint projects for the development of Kazakhstan deposits such as Irkol (in the Kyzylordinskaya region, with an annual production capacity of 750 tons of U3O8) and Semizbay (Akmolinskaya region, annual production capacity 500 tons of U3O8) whilst the China National Nuclear Corp (CNNC) will acquire participatory interests in the Zhalpak deposit (South-Kazakhstan region, 750 tons of U3O8). Kazatomprom will own 51% of shares in the above mentioned joint ventures with 49% belonging to its Chinese partners. China has officially confirmed the construction of 56 NPPs. The head of Kazatomprom also said that construction makes up 50% of the final cost of each NPP. According to Mr. Dzhakishev’s estimation the global market of NPP construction stands at $USD 1.5 trillion. To speed up the implementation of the joint Kazakhstan-China projects Kazatomprom is planning to open a representative office in Beijing.

Moukhtar Dzhakishev also announced that on November 5, 2008 a conference, with executives from all Kazatomprom’s subsidiaries, joint ventures and business subdivisions, had been held with the impact of the global financial crisis on Kazatomprom’s business being on the agenda. As a world level company, Kazatomprom elaborated various scenarios for operation in the situation of the global economy slowdown. The conference came to the conclusion that, in particular, in such an unfavorable situation, Kazatomprom has competitive advantages as the Company has extensive experience of work in critical conditions. “9 out of 11 years were years of our life and work in adverse conditions, which became for us a familiar environment. Our executives are better aware of work in crisis and we have more anti-recessionary experience than many Western companies”, Mr. Dzhakishev pointed out. In such an uncertain situation as that caused by the global crisis, Kazatomprom’s projects are becoming more attractive. >Kazatomprom has not less but more potential customers for Kazatomprom’s products. Various development options to be considered by Kazatomprom enterprises are lack of foreign financing, limited financing and high interest loans. Preparing such scenarios is a key component of crisis management. According to Mr. Dzhakishev, a negative scenario which could mean no access to external financing is hypothetical. “However, since the likelihood of the event is greater than zero, we must have all options on the table. No one wants to have to work out the scenario once the crisis has already hit”, - Mr. Dzhakishev emphasized. He also made the point that Kazatomprom has recently been integrated into SamrukKazyna (the national welfare fund), and that such an integration would give an opportunity to obtain secured financing for new projects. For Kazatomprom, transition to SamrukKazyna would mean mitigation of risks”, M. Dzakishev said. In conclusion, the Kazatomprom President underlined there was no <«feeling of concern about Company prospects – the world crisis will not impact production or social aspects of the Company.

KAZATOMPROM is the national operator of the Republic of Kazakhstan for export of uranium and its compounds, rare metals, nuclear fuel for nuclear power plants, special equipment, technologies and double-use materials. The main activities of the company are: geological exploration, uranium production, manufacture of nuclear fuel cycle products, reactor construction, nuclear power plants, non-ferrous metallurgy and production of construction materials, electric energy sector, science, social welfare and staff training. Today there are more than 25 000 employees in the company. Kazatomprom is among the leading uranium production companies of the world.


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