China and Kazakhstan sign cooperation agreements

04 November 2008

Agreements on cooperation in uranium production and nuclear energy have been signed during of meeting of the prime ministers of China and Kazakhstan. The agreements follow the signing of memoranda in September 2007.

The Chinese and Kazakh prime ministers meet
China's prime minister, Wen Jiabao, met with the prime minister of Kazakhstan, Karim Masimov, in Astana on 31 October. Following the meeting, the Kazakh and Chinese foreign ministers, Marat Tazhin and Yang Jiechi, signed a protocol on amendments and supplements to the agreement establishing the Kazakh-Chinese Committee for Cooperation of 2004.

Among the documents signed was an agreement on cooperation between state-owned KazAtomProm and China Guangdong Nuclear Power Co (CGNPC) on the joint development of uranium resources, production of nuclear fuel, the long-term trade of natural uranium, nuclear power generation and the construction of nuclear power plants. Another agreement signed, between KazAtomProm and China National Nuclear Corp (CNNC), focuses on the implementation of long-term nuclear cooperation projects.

Memoranda were signed in Beijing in September 2007 that would see a large portion of China's uranium fuel needs met by Kazakhstan. They stipulated that uranium extracted by joint ventures would be delivered as 'high value added' products. Those documents formed a Framework Agreement for Pushing Forward of Strategic Cooperation, according to a Kazatomprom announcement. They laid the groundwork for future joint venture projects to extract Kazakh uranium from the ground and for KazAtomProm to invest in the Chinese nuclear power industry.

In October 2007, KazAtomProm president Moukhtar Dzhakishev said that CNNC and CGNPC are to take a 49% stake in a uranium mining venture in Kazakhstan with KazAtomProm retaining a 51% stake. In exchange, KazAtomProm would take equity in Chinese nuclear fuel processing or electricity generation plants. "This is the first time China has allowed any foreign company to become a shareholder in its atomic power industry enterprises," said Dzhakishev, although he did not elaborate on the plants and ventures involved.

KazAtomProm is a major producer of uranium, supplying about 9% of the world's current needs. However, the country holds 16% of the world's uranium resources and plans to increase mine production accordingly. It also is planning to develop the front-end nuclear fuel facilities that would allow it to produce finished nuclear fuel assemblies, adding a great deal of value to its natural resource.

These are the latest in a series of agreements between the countries, following a December 2006 strategic agreement and a May 2007 accord on uranium supply and fuel fabrication. Kazakhstan has also signed a number of alliances with Japanese companies eager to gain secure access to uranium and participate in KazAtomProm's expansion.