Projects financed by the EDB
Development of Zarechnoye uranium deposit
Zarechnoye JV in South Kazakhstan Oblast
In the context of growing energy dependence for most countries and the anxiety created around hydrocarbon fuels over the last ten years, many countries are now actively searching for new energy sources. The importance of nuclear power is still great. Nuclear power stations generate 16% of the world’s electricity. About 440 nuclear power plants operate in 30 countries and their number may increase by 60% by 2030. Thirty new reactors are being built around the world.
The development of nuclear energy requires international cooperation based on long-term strategic interaction between the countries that own modern nuclear technologies and major producers of nuclear feedstock. This cooperation is of significant benefit to all sides: together they can promote nuclear (industrial, technological, fuel) products in third countries’ markets and, at the same time, ensure reliable uranium supplies to their own markets to help overcome the energy deficit. For feedstock producers, uranium mining is vital for economic development and diversification.
Kazakhstan, which has a significant portion of the world’s uranium reserves, has made the development of this sector one of its priorities. In terms of uranium production, Kazakhstan is surpassed only by Canada and Australia and it has the potential to become the largest uranium producer globally when its production reaches 15,000 tons per year.
Compared with the world’s largest consumers of uranium (France, Canada, the US, Japan, and South Korea), however, it is Russia that offers the greatest advantages as a development partner for Kazakhstan in the nuclear sector. Both countries are looking to extend their economic integration. Cooperation between the nuclear sectors of Kazakhstan and Russia has long been supported by the long-standing compatibility of their industrial facilities and processes throughout the nuclear fuel cycle: in the USSR, the needs of the nuclear sector were largely met from Central Asian reserves.
Both countries have a similar approach to nuclear power and have complementary national programmes for the development of the sector. Sustainable development in Russia and Kazakhstan is being challenged by their energy deficit. One of the key solutions to this problem is the development of nuclear power, which in turn will necessitate the expansion of nuclear fuel production facilities. In the nuclear sector the two countries are working in cooperation on uranium mining and enrichment.
The project to develop the Zarechnoye uranium deposit in southern Kazakhstan is one success story of the Comprehensive Programme of Partnership between Russia and Kazakhstan in the Peaceful Utilization of Nuclear Energy approved by the heads of states of both countries.
Tekhsnabexport OJSC of Russia and Kazatomprom NAC of Kazakhstan have set up the Zarechnoye joint venture in South Kazakhstan region to mine uranium ore and process it to produce uranium oxide yellow cake. Further enrichment of uranium and production of fuel rods is due to be provided by the Angarsk Electrolysis and Chemical Plant in Russia.
- Yellowcake (uranium concentrate) is Zarechnoye’s end product.
In 2006, the EDB provided a five-year financing package totaling US $ 63 m for the development of the deposit. This allowed Zarechnoye JV to start production as early as 2007.
The company uses heap leaching as the most environmentally friendly and the least invasive extraction method. This is particularly important in the virgin steppes of South Kazakhstan where the deposit is located.
In 2011, the company’s output was 1,000 tons.
The project’s socioeconomic impact is significant. The company has created 243 jobs; its tax payments up to 2022 (the development period) will total approximately US $ 25 m. The project is an integration initiative, not simply a joint technological undertaking between two countries in the context of nuclear cooperation, as it expands mutual trade: Tekhsnabexport OJSC has entered into a long-term contract with Zarechnoye JV for the supply of its products worth a total US $ 1 bn.