March 26, 2024
Yanliang Pan
The following is an excerpt from Carnegie Endowment for International Peace.
China’s economic relationship with Kazakhstan is often framed in clichéd narratives associated with Beijing’s Belt and Road Initiative, in which Kazakhstan represents the “buckle” of the land-based economic belt connecting China and Europe. As the largest country in Central Asia, Kazakhstan is unquestionably critical to Beijing’s vision of westward connectivity, but reducing Kazakhstan to no more than a node in Beijing’s transregional geoeconomic strategy obscures Chinese actors’ adaptive approach to Kazakhstani local interests while overlooking the gains that Kazakhstani actors themselves have skillfully extracted in key sectors of engagement with China.
One example of these dynamics is bilateral cooperation in uranium extraction and nuclear fuel supply, where Chinese actors have had to play Kazakhstan’s game rather than the other way around.
Kazakhstan is the largest producer of natural uranium worldwide, accounting for 43 percent of global uranium production in 2022.[1] One reason is the country’s abundant uranium resources. Another is the geology of its deposits, which allows for low-cost, high-profit extraction through the method of in-situ leaching (ISL). Kazakhstan possesses two-thirds of the world’s ISL-suitable reserves and in 2022 accounted for nearly 80 percent of the world’s ISL-derived natural uranium supply.[2] The enormous cost advantage has allowed the national nuclear company, Kazatomprom, to become one of the world’s most competitive uranium producers and to wield significant bargaining power over foreign uranium companies eager to access the country’s low-cost resources.
Leveraging that power by trading uranium access for foreign investment, technology, and market share, Kazakhstan has modernized its uranium industry and vastly expanded the volume of its uranium production over the past two decades. From a mere 796 metric tons of uranium (tU) in 1997,[3] when Kazatomprom first consolidated the country’s Soviet-era civil nuclear assets,[4] annual uranium production in Kazakhstan grew by more than thirty times to some 25,000 tU in 2016 before depressed global prices led to a voluntary reduction in output.[5] With prices recovering, Kazatomprom expects to ramp up to 31,000 tU by 2025.6 Since the country produces no nuclear power domestically, the question is where all that uranium might go.
Continue reading at Carnegie Endowment for International Peace.
