Kazatomprom announces physical uranium fund

18 October 2021

Kazatomprom has announced it is to participate in a physical uranium fund, ANU Energy OEIC Limited, established on the Astana International Financial Centre (AIFC). The fund will hold physical uranium as a long-term investment, with its initial USD50 million of purchases financed by its founders and plans to raise USD500 million for additional uranium purchases in a second development stage.

(Image: Kazatomprom)

The initial USD50 million is sourced from Kazatomprom at 48.5%, National Investment Corporation of the National Bank of Kazakhstan (NIC) at 48.5%, and UAE-based investment company Genchi Global Limited at 3%. Genchi is to be the fund manager. Once the fund is operating, an additional public or private offering is planned to raise capital of up to USD500 million from institutional and/or private investors, with the proceeds to be used for additional uranium purchases. The timing and details of this second development stage will be determined by market conditions, Kazatomprom said.

Kazatomprom CEO Mazhit Sharipov said ANU Energy has been in development for almost four years as part of the company's value-focused strategy, and will be operating in an environment of tightening supply which will drive "positive benefits" for stakeholders. "The Fund will leverage the combination of Kazatomprom's expertise in the uranium market and NIC's proven track record, with the AIFC offering investors direct exposure to the attractive opportunity presented by the long-term fundamentals of the uranium market and nuclear industry,” he said.

The global transition towards clean energy, including nuclear power, provides a "strong investment thesis" for the uranium industry, Kazatomprom said, but opportunities for investors to gain exposure to the commodity have been limited to two uranium funds which are listed in Toronto, Canada and London, UK. The Sprott Physical Uranium Trust began trading on the Toronto Stock Exchange in July and now holds over 32 million pounds U3O8 (12,300 tU). London-based Yellow Cake was admitted to the AIM Exchange in July 2018 and has a long-term agreement with Kazatomprom under which it has the option to purchase up to USD100 million of uranium at market-related prices, subject to conditions. The company has to date purchased some 13.9 million pounds U3O8, which will increase to 15.86 million pounds when its latest purchase, announced in August, has completed.

"ANU Energy, being established through the AIFC in Kazakhstan, will be the first uranium fund providing potential direct access for emerging market investors of various categories, particularly those focused on ESG and clean energy, as well as commodity funds, sovereign wealth funds and state-owned enterprises," the company said.

Kazatomprom - the national atomic company of Kazakhstan - is the world's largest producer of uranium, with its attributable production - all from in-situ leach operations in Kazakhstan - providing about 23% of global primary uranium production in 2020. Its securities are listed on the London Stock Exchange and Astana International Exchange. The company sells its uranium and uranium products directly from its headquarters in Nur-Sultan, Kazakhstan, and through its Switzerland-based trading subsidiary, THK.

ANU Energy will be an independent entity with its own board of directors.

Researched and written by World Nuclear News