TAIKONUR, Kazakhstan — Cameco Corp. plans to double capacity at its Inkai uranium mine in Kazakhstan once it has the conversion facilities to advance nuclear fuel production, the company's chief executive said.
Jerry Grandey said the mine's annual capacity should rise to 4,000 tons from the current 2,000 tons after Cameco and its joint venture partner, state firm Kazatomprom, agree on how to process the uranium. He declined to give a timescale.
"The joint venture partners are in agreement that we should go from two to four thousand," Grandey said in an interview. "But to do that, we need to be advancing the conversion aspect."
Kazatomprom aims to become a producer through every step of the nuclear fuel cycle by 2020, while Cameco aims to double uranium production worldwide by 2018 to meet growing demand from the nuclear industry as more reactors are built.
"There's no shortage of uranium in the world, but there is a shortage of economically developable deposits that are advanced to a point where they can be brought into production within the next five years," Grandey said.
Cameco invested $350 million to build the Inkai mine on the remote steppe of southern Kazakhstan. Uranium is extracted using the in-situ leaching method, which recovers the metal through boreholes without the need for digging mine shafts or pits.
Sergei Breus, general director of the Inkai joint venture, said the mine was already producing five to six tons of uranium every day, which works out to 1,825 tons to 2,190 tons a year.
Saskatoon-based Cameco owns 60 percent and Kazatomprom 40 percent of the venture. Drums filled with yellowcake, each weighing nearly 400 kilograms, are driven 160 kilometers from the mine to the railhead, from where they are delivered to port.
The companies have formed a separate joint venture to explore the conversion of concentrate into gas form as uranium hexafluoride, the stage prior to enrichment.
Grandey said a feasibility study would be completed by the end of this year.
One proposal is to build a conversion facility at the Ulba Metallurgical Plant in the eastern Kazakh city of Oskemen. This could have capacity to produce 12,000 tons of uranium hexafluoride, or 17 percent of the world's conversion capacity.
"Another option is to be located somewhere in Europe or North America," Grandey said.
Kazakhstan, which holds more than 15 percent of global reserves, last year surpassed Canada as the world's largest uranium producer. The Central Asian state expects to raise production this year to 18,000 tons from 13,900 tons in 2009.
The country's single-minded approach to developing its reserves has helped it emerge as the top producer, said Grandey, who spent two summers in the late 1980s traveling to the Soviet Union's closed nuclear cities.
"The real secret is the political will and commitment to move forward with uranium mining as a national priority, which gives them a voice on the nuclear energy market," he said. "We have operated in a number of jurisdictions, and I have always viewed Kazakhstan as very stable."
Grandey, who says he was an anti-nuclear activist while at law school, said more should be done to develop uranium use worldwide.
The need for new mines will be exacerbated when a 20-year deal through which Russia exports uranium from decommissioned nuclear weapons expires in 2013, he said.
This will remove 10,886 tons of reactor-quality uranium from the market, about 13 percent of world consumption, which has helped restrain uranium prices by bridging the gap between supply and demand.
Kazakhstan will provide some of this mining growth. Current reserves will allow the country to expand production to some 25,000 to 26,000 tons by 2015.
"Inkai has the potential resources to keep us busy for a long period of time. The property itself warrants a lot of additional work in terms of exploration and mine development," Grandey said.
Kazatomprom also operates several joint ventures with foreign firms, including Canada's Uranium One, France's Areva and several Japanese and Chinese companies.