Uranium producers feel impact of supply chain issues

02 November 2021

Kazatomprom has reduced its expected production figures for 2021 due to delays in exploration and wellfield development activity, citing pandemic-related supply chain issues which have had a material impact on production schedules. The Kazakh uranium producer's announcement comes days after Canadian company Cameco reduced its forecast for fuel services production for the year citing supply chain issues.

Uranium production operations in Kazakhstan (Image: Kazatomprom)

Kazatomprom's uranium production of 15,960 tU (100% basis; 8792 tU attributable) for the first nine months of 2021 was 6% higher compared to the same period in 2020, and notably higher for the third quarter compared with the same period in 2020, when pandemic-related safety measures impacted production volumes throughout the second half of that year, Kazatomprom said. However, the company's 2021 production expectations have decreased due to delays in exploration and wellfield development activity.

"Pandemic-related supply chain issues have resulted in limited access to certain key operating materials and equipment (production reagents, certain types of pipes and pumps, specialized equipment, drilling rigs), which has had a material impact on the company’s production schedule," it said in its quarterly operations and trading update. The company now expects 2021 production to be 21,700-22,000 tU (previously 22,500-22,800 tU) on a 100% basis and 11,800-12,000 tU (previously 12,100-12,400 tU) on an attributable basis.

Year-to-date supply chain delays have resulted in a shift of some 800 tU production (100% basis) into future periods, it said. This production shortfall is ultimately expected to be recovered over the life-of-mine at the impacted assets. "Uncertainty in the production plans relate to the operational challenges created by the ongoing supply chain limitations that remain partially unresolved at this time," it said.

Canadian supply chain

Kazatomprom's Q3 results were announced days after Cameco said the potential for post-pandemic impacts on construction materials, equipment and labour could exacerbate production risk in future years in both its mining and fuel services operations.

The Canadian company adjusted its forecast for fuel services production for the year, citing temporary restrictions in the supply of hydrogen to its Port Hope conversion facility. The company said it now expects to produce between 11.5 million and 12.5 million kgU this year. The supply constraint is expected to be resolved in the fourth quarter of the year, with no impact on customer deliveries this year, but the potential for post pandemic impacts on materials, reagents and labour "remains uncertain and could introduce potential risk to the production rate in 2022," it said.

Cameco's attributable production from Cigar Lake was 2.0 million pounds U3O8 (769 tU) in the third quarter, with 3.3 million pounds U3O8 for the first nine months of the year. The company said it expects the mine to produce up to 12 million packaged pounds of uranium this year, of which Cameco's share will be up to 6 million pounds.

The company currently has no plans to resume production at its McArthur River/Key Lake operation, which was suspended in February 2018.

Researched and written by World Nuclear News