Interview with Brandon Munro, Bannerman Energy (OTC:BNNLF) about the Kazatomprom 2024 Acid Shortages
Our previous interview: https://youtu.be/4c-taNJf_Tk
Recording date: 1st February 2024
Kazakhstan’s state-owned uranium titan Kazatomprom rattled markets Thursday, disclosing that sulfuric acid shortages will impede the planned production build-out in 2024 and potentially 2025. With acid availability impacted by robust fertilizer demand and constrained regional supply, Kazatomprom lowered its 2024 guidance. The company also cast doubt on achieving prior 2025 targets without meaningful acid relief.
The revised guidance comes despite Kazatomprom confirming it met 2023 output expectations, down only 1% year-over-year. But with the newly-announced acid challenges set to persist for years rather than months, Kazatomprom commented that “existing and future production levels” face downside risks. That serves as a reality check for investors banking on smooth sailing toward higher uranium prices.
In the eyes of Bannerman Resources CEO Brandon Munro, an experienced Kazakhstan watcher, the risks around acid supply are firmly “to the downside” from here. Absent a domestic source expansion from more metals mining, which current copper and nickel economics do not support, acid availability remains in question. That leaves Kazakhstan heavily reliant on one long-dated solution - an $300 million acid plant starting up in 2026.
With Kazakhstan home to over 40% of global uranium output, an acid-induced supply slowdown of unknown magnitude will complexify uranium’s structural deficit. As Munro summarized, if the world’s largest producer struggles “to get into production,” it sounds “warning bells” for “others looking to get into production or restarts.” That cycle now appears more prone to hiccups.
Munro believes that at least through 2025, Kazatomprom’s challenges provide “further support for the uranium market.” With meaningful new Kazakh supply unlikely before late 2026, the wide mine-reactor deficit that catalyzed uranium’s dazzling 2021 bull run looks set to linger. That paints a sunny backdrop for prices amidst a scramble for long-term utility contracts that fuel both reactors and development capital. But it also serves notice that murmurs of a supply deluge may prove overblown.
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