The deal for part of the Budenovskoye mine, projected to become the world’s biggest source of the radioactive metal, to Russia’s nuclear power monopoly, Rosatom, went through at the end of last year, according to people familiar with the matter. The deal was pushed by Kazakhstan’s sovereign wealth fund against the wishes of the leadership at miner Kazatomprom, the people said, asking not to be identified discussing a sensitive matter.
A fleeting reference to the change of ownership was made in Kazatomprom’s 2022 financial overview in March and its annual report in April, though Rosatom wasn’t identified as the buyer.
Through its wealth fund, the Kazakh government holds 75% of Kazatomprom, which trades on the London Stock Exchange. The pressure to complete the deal behind closed doors prompted the loss of two CEOs, a CFO, a chief operating officer and a chief commercial officer in less than 18 months as they worried the lack of disclosure risked breaching their legal duties as company officials, the people said.
Russia accounts for half the world’s uranium enrichment capacity, supplying fuel to nuclear reactors around the world, but relies on imports of Kazakh ore to supply its plants. Gaining a stake in Budenovskoye, which is expected to account for more than 10% of global output within three years, will help give Rosatom security of supply.
The deal had apparently been discussed for several years. At the end of last year, under instruction from the sovereign wealth fund, Kazatomprom didn’t recommend the exercise of the state’s right of first refusal on a 49% stake in the venture developing blocks 6 and 7 at Budenovskoye, the people said. That allowed Rosatom to step in and pursue the deal to buy the stake, they said.
The deal comes against the background of an increasingly nuanced relationship between Kazakhstan and Russia. Although President Kassym-Jomart Tokayev relied on Russian troops to help crack down on civil unrest in January last year, since the invasion of Ukraine the Kazakh leader has been more equivocal in his relationship with Vladimir Putin’s regime and sought to maintain relations with the US and Europe.
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