Kazakhstan’s national atomic company Kazatomprom has created a trading subsidiary, TH Kazakatom, to bring liquidity to the uranium spot market, chief commercial director Riaz Rizvi told the World Nuclear Fuel Cycle (WNFC) conference in Canada on 28 April.
Rizvi said that, as part of Kazatomprom's transformation programme, it had established a trading office in Switzerland to buy and sell uranium on the spot market. Staff in Switzerland will be hired by the third quarter of this year, when spot market activities are due to begin. Before his appointment at Kazatomprom earlier in April, Rizvi worked in energy trading and marketing commodities at AEP, Constellation Energy, Nufcor and NuCap.
"The problem is the fact that we are not buying and selling material. And by not buying and selling material, very small transactions have the ability to move the market significantly," he said, noting that only 200,000 lbs U3O8 were traded last week,” Rizvi said. Kazaktomprom had hired about 40 external consultants for its transformation programme, but found that "we need to become much more customer centric”, he added. Long gone are the days when we could just sell it and people would buy it".
The transformation programme was announced in October 2015, following the example of other major uranium mining companies by creating a trading subsidiary. Umirzak Shukeyev, chairman of Kazakhstan's sovereign wealth fund, Samruk-Kazyna, said at the time that the key objectives included "trebling the company's value" by 2025. Samruk-Kazyna, Kazatomprom's sole shareholder, was launched in 2008 to modernise Kazakhstan's economy and help attract foreign investors.
Kazatomprom is not using its position to help its customers when delays or other problems occur, Ruzvi said. "Pricing flexibility is probably the one reason why we've been unsuccessful so far in really penetrating the European and US markets. Our pricing mechanism doesn't necessarily line up with the way that our customers want to buy." Based in Switzerland, TH Kazakatom is closer to the US time zone, as well as to the European and US markets.