Sustainable Development of U Production: Time Challenge Alexander - - PowerPoint PPT Presentation

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Sustainable Development of U Production: Time Challenge Alexander - - PowerPoint PPT Presentation

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Sustainable Development of U Production: Time Challenge Alexander V. Boytsov Deputy Director General, ARMZ Uranium Holding Moscow, 2010 1 World atomic energy development NPPs construction , pcs. Today 436 operating Nuclear Power

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Sustainable Development of U Production: Time Challenge

Alexander V. Boytsov Deputy Director General, ARMZ Uranium Holding

Moscow, 2010

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 88 % growth of operating NPPs worldwide.  119% growth of total installed nuclear capacity.  Most active nuclear industry development - in China and India.  2,5-fold grow of installed NPP’s capacity in Russia.

World atomic energy development

NPP’s construction, pcs. NPP’s installed capacity, GWe Today In a 20 years:

Source: WNA

 436 operating Nuclear Power Reactors with a installed capacity of 372 GWe.  Most of operating NPPs are located in the USA (104), France (59), Japan (53) and Russia (31).  49 new reactors with a combined installed capacity

  • f

44.35 GWe are under construction in 13 countries.

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Uranium demand and atomic energy growth

The main factors of demand/supply relationship

Reactor related uranium demand Additional demand Secondary sources Uranium mining

  • Countries’ policy in atomic

energy

  • Trends in new NPPs

construction

  • NPP’s operation time

extension

  • NPPs decommissioning
  • HEU-LEU Program
  • US policy in the

uranium inventory reduction and stock balance selling

  • Policy in spent fuel and

HEU recycling

  • Favorable uranium

prices

  • Sufficient and

qualitative uranium resources

  • Sufficient uranium

production capacities

  • Staffing
  • Uranium as a trading

commodity (stocks trading)

  • Energy companies

stockpiles

Key issue of the atomic energy development – sustainable and long-term uranium supply

SUPPLY DEMAND

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Projected U requirements to 2030

WNA 2009 Nuclear Fuel Market Report: Reactors requirements growth from 68,000 to 104,000 tU to 2030 (53%) Uranium production needs to increase from 50,000 to 99,000 tU

Is it possible for U industry to double uranium production within 20 years?

20000 40000 60000 80000 100000 120000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Добыча урана Вторичные источники Общие потребности

WNA,2009, средний сценарий Дополнительный спрос (складские запасы АЭС, закупки инвестиционных и хеджевых фондов)—порядка 5% от реакторных потребностей

tU

WNA 2009, reference scenario Additional demand (inventories, investors, hedge funds) – 5% of plant requirements

U production Secondary sources Total U requirements

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Historical uranium production vs NPPs demand

The last 20 years – uranium production covered about 40% of uranium demand. The difference was covered by inventories and secondary sources. Low uranium prices din not stimulate uranium production production

10000 20000 30000 40000 50000 60000 70000 80000

U, t ons

Accumulation

  • f U

inventories Uranium production NPPs U requirements

68 ths tU 50 ths tU

Consumption

  • f inventories

Since 1945

  • Ths. tU

Produced 2 468 Consumed 1 919 Stockpiled 549

20 40 60 80 100 120 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 цена спот цена по долгосрочным контрактам

USD per pound of U3O8

spot price long-term price

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9135 8001 6427 5477 4624 2980 2340 1346 1210 1140 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 13900 10175 7962 4681 3564 3243 2338 1442 3000 2000 4000 6000 8000 10000 12000 14000

World’s largest U mines in 2009

World uranium production at a glance

Facility Main owner U production, t % of the world total

McArthur River Cameco 7340 15 Ranger Rio Tinto 4423 9 Rossing Rio Tinto 3574 7 KATCO AREVA 3250 6 Priargunsky ARMZ 3003 6 Olympic Dam BHP Billiton 2981 6 Arlit AREVA 1808 4 Rabbit-Lake Cameco 1447 3 McClean Lake AREVA 1388 3 Akouta AREVA 1435 3

Uranium prices increased in 2007 led to a growth of uranium production. Russia/ARMZ - world’s 5th by country/company in uranium production

Countries – leaders of U production in 2009, tU World uranium production in 2004-2009, tU Companies – leaders of U production in 2009, tU

10000 20000 30000 40000 50000 60000 2004 2005 2006 2007 2008 2009 Почие США Узбекистан Нигер Россия Намибия Казахстан Австралия Канада

39357 41102 43648 50305

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Factors affected on U production plans

Main risks hampered development of biggest U mining projects Uranium production is behind the declared plans. Reasons:

  • Speculative announcements of some companies, especially juniors
  • Financial crisis
  • Price volatility
  • Technical limitations
  • Political, social and environmental factors

Resources U production

Technical risks Political, ecological and social risks Financial risks Geological and mining risks

Deposit Financial risks Technical risks Political social and environmental risks Olympic Dam (expansion),

V V

Dominion

V

Сigar Lake

V V

Imouraren

V

Midwest

V

Jabiluka

V

Elkon

V

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Uranium production capabilities to 2030

8

WNA,2009, reference

Stages of the uranium industry development  2010- 2020 - reactor demand covered by uranium production  after 2020 - uranium production shortage  after 2025 – decrease of uranium production and production capacity shortage (decommissioning of some mines due to U resources depletion)

Uncovered demand - «window of opportunities» tU

production

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Uranium production forecast for leading companies (ARMZ evaluation)

9

  • 1,0

2,0 3,0 4,0 5,0 6,0 7,0 8,0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Ranger Rossing Rossing-Expansion Resources 398 ths.t Resources 270 ths.t

  • 2,0

4,0 6,0 8,0 10,0 12,0 14,0 16,0 18,0 20,0 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Christensen Ranch Imouraren Arlit Akouta Tortkuduk Muyunkum Exp. Muyunkum Ryst Kuil Trekkopje Bakouma Kiggavik/Sisson Millennium Midwest McClean Lake Cigar Lake Mc Arthur River Resources 543 ths.t Resources 209 ths.t

  • 2,0

4,0 6,0 8,0 10,0 12,0 14,0 16,0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Kintyre US ISL Exp. Smith Ranch - Highland Crow Butte Inkai Exp. Inkai Millennium Rabbit Lake Cigar Lake MacArthur River Resources 455 ths.t Resources- 178 ths.t

  • ths. tU

Cameco Rio-Tinto AREVA

  • After 2024 – sharp drop in uranium production due to the

depletion of U resource base at McArthur River and Cigar Lake.

  • Possible deficit of uranium resources. Residual U resources - 39%
  • f initial.
  • 2027 - production shut down, residual U resources - in Jabiluka

deposit (non-developed due to social and political limitations)

  • Production decrease since 2023 (abandoned McArthur, Sigar Lake ,

Akouta, Trekkoppje). Residual U resources – 38% of initial.

Even subject to realization of all plans for development of new mines and expanding existing facilities, after 2025 uranium production will decrease and will cause the overall decline of uranium production.

  • ths. tU
  • ths. tU
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1679 950 566 545 481 435 367 279 276 196 689 200 400 600 800 1000 1200 1400 1600 1800 2260 615 543 430 398 392 147 140 500 1000 1500 2000 2500

U resources is a key factor for sustainable development

  • f uranium production
  • leading companies will produce about 1.8 million

tons of uranium in 2009-2030 (U resource consumption - 37%)

  • 62% of the total companies’ U resources will be

concentrated in the Olympic Dam deposit by 2030 (copper-main commodity)

  • U resources of primary uranium mines will be

reduced by 2030 more than twofold Uranium resources by leading companies, th.tU Uranium resources by countries, th.tU

Total U resources – 4925 th.t (in-situ) World recoverable U resources - 6463 th.t (IAEA/OECD-2009)

500 1000 1500 2000 2500 3000 3500 4000 4500 5000 2009 2030 Paladin Energy Uranium One Cameco Rio Tinto Казатомпром Areva АРМЗ BHP Billiton

Exhausting of U resources base by leading companies as a result of its production, th.tU

Kazatomprom ARMZ

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The cost categories of U resources, involved in production

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< 80 $ / kg 80 – 130 $/kg > 130 $/kg

  • 10,0

20,0 30,0 40,0 50,0 60,0 70,0 80,0 90,0

  • ths. tU Variation of uranium resources structure on cost categories in 2008-2030

2008 2030

12% 49% 39% 52% 48%

  • Significant reduction of large mines with the

cost categories of resources <USD 80/kg U

  • By 2030 large deposits (McArthur River, Cigar

Lake, Rossing, Ranger, Akouta, Akdala, Inkai, Millenium, Karamurun, etc.) will be depleted

  • Deposits with the resources cost

>USD130$/kg U will come into production

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Main objectives of the world uranium mining industry

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Development of uranium project from discovery to production takes about 15-20 years Main conditions for sustainable uranium mining industry development during the next 5 years:  Intensify uranium exploration aimed at discovery of new large- and medium size uranium deposits Revaluate current resources and develop stand by deposits for mining Implement innovative environmentally harmless technologies Resolve staffing issues

Discovery Exploration and Scoping Study Feasibility study Engineering and construction Production Preliminary Feasibility Study

2010 2020 2030

Realization of uranium mining plans should be associated with stable, adequate and transparent uranium market prices

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55 27 25 21 20 14 1

  • 10

10 20 30 40 50 60 9135 8001 6427 5477 4624 2980 2340 1346 1210 1140 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000

ARMZ: 2009 key results

Uranium production in 2007-2009 ARMZ – one of the world leaders in U production Production Growth Rate In 2009

ARMZ – World’s third by U production growth rate ARMZ – World’s 5th by uranium production

tU

2009 :  ARMZ produced 4624 tU - 5% more than in 2008  Uranium production in Kazakhstan - 6,4 fold increase (from 166 tU in 2008 to 1063 tU in 2009)  World’s third by uranium production growth rate.  World’s 2nd by uranium resources (after BHP Billiton) U resources growth at above 100,000 tU as a result of exploration and M&A activities

500 1000 1500 2000 2500 3000 3500 4000 4500 5000 2007 2008 2009 Karatau Akbastau Zarechnoe Khiagda Dalur PPGHO tU %

Priargunsky

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11 12

Planned facilities

  • 6. Elkon
  • 7. Gornoe
  • 8. Olovskaya

Operational and under construction facilities

  • 1. Priargunsky
  • 2. Khiagda
  • 3. Dalur
  • 4. Akbastau
  • 5. Zarechnoe

Exploration ventures and Prospective projects

  • 9. Mongolia
  • 10. Namibia
  • 11. Armenia

ARMZ- U1 alliance

ARMZ 2009 Global Presence

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ARMZ strategic objectives

Development of uranium production at existing and under construction mines Development of new uranium mines in Russia (Yakutia, Transbaikalia) Development of uranium production in Kazakhstan Diversification of the uranium resources through the access to low-cost U resources worldwide Diversification of commodities (NPP materials, gold, etc.)

The main goal - to meet demand of Russian nuclear industry in uranium and to take a leading position on the global uranium market

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Thank you!