Global uranium resource leader abruptly halts production! Uranium mining stocks in the US experience a significant surge.
1min read Uranium stocks and ETFs rose on Thursday after Cameco (CCJ.US) said its Inkai joint venture in Kazakhstan unexpectedly halted production due to a government license expiration. CCJ's stock rose slightly, but other uranium stocks were also in demand, with the uranium ETF-Sprott (URNM.US) jumping.Inkai is a joint venture between Cameco and Kazakhstan's state-owned uranium company Kazatomprom, with Cameco owning 40%. According to its third-quarter earnings report on November 7, Inkai was expected to produce 7.7 million pounds of uranium in 2024, of which 2.3 million pounds were delivered to Cameco, which is slightly above Cameco's expected full-year production of 23.1 million pounds.Cameco said on Thursday that Inkai had suspended production activities on January 1. The company said it had expected the project to receive an extension of its local energy ministry's license based on information as of December 26."We are disappointed and surprised by this unplanned suspension and will seek further clarification as to how this has come to pass and the potential production and financial impacts in 2025 and 2026 (including future dividend impacts)."The event raised questions about Kazakhstan's reliability as a Cameco partner and more broadly as a uranium supplier. The impact could be significant. According to the World Nuclear Association, Kazakhstan is the world's largest uranium producer, accounting for 43% of world supply in 2022.Kazatomprom said in a statement that the pause was "due to a delay in submitting required documents." The state-owned company said it expects to submit the documents "in the coming weeks, after which the situation will be resolved."It is understood that Russian President Putin visited Kazakhstan on November 27 last year to discuss strengthening energy ties. Kazakhstan voters voted in favor of building the country's first nuclear power plant in October last year. Russia was one of the countries expressing interest in participating in the project.In other nuclear-related news, Constellation Energy (CEG.US) announced a 10-year, $840 million contract with the U.S. General Services Administration (GSA) to provide nuclear power for federal agencies.