Kazakhstan seeks to reduce Russian and Chinese influence in its uranium industry

By Sultan Musayev | 2025-03-26

ALMATY -- A contract with a Swiss company is the first step in a diversification strategy that will allow Astana to strengthen ties with Europe and reduce risks associated with dependence on partners like Russia and China.

Kazatomprom signed its first contract with Swiss energy company Axpo Power AG and nuclear power plant operator Kernkraftwerk Leibstadt AG (KKL AG) for a supply of natural uranium concentrate that will be used to ensure the stable operation of the Beznau and Leibstadt nuclear power plants.

The signing ceremony took place in February at Axpo Power AG headquarters during the visit of a Kazatomprom delegation to Switzerland.

'Our nuclear industry needs to be diversified'

The agreement opens up new opportunities for the Kazakh nuclear operator by expanding its presence in the European market, Kazatomprom said.

The contract with Axpo Power will help Kazatomprom implement its "strategy to diversify our sales channels," Vladislav Baiguzhin, Kazatomprom's chief commercial officer, said in a company statement in February.

The agreement with Switzerland's largest energy company opens up new opportunities for cooperation with European nuclear power plant operators and strengthens Kazatomprom's position in the global uranium market, Kazatomprom added.

Observers, though, link the agreement to an effort to reduce Russia and China's influence over Kazakhstan, the global leader in uranium mining. It accounts for 43% of world production.

"Kazakhstan has a chance to reduce its dependence on traditional partners -- Russia and China," Talgat Ismagambetov, chief researcher at the Institute of Philosophy, Political Science and Religious Studies in Almaty, told Global Watch.

"Our nuclear industry needs to be diversified by expanding cooperation with Western countries," he continued, adding that this strategy is especially significant in this geopolitical environment and is beneficial in the long term.

Moscow vs. Beijing

Moscow and Beijing hold significant positions in Kazakhstan's uranium industry.

The state-owned Russian corporation Rosatom, through its subsidiary Uranium One Group, owns a significant stake in the Kazakh uranium industry. Until last December, Rosatom was involved in six of Kazatomprom's 14 mining projects.

The uranium reserves in Kazakhstan at that time under Russian control amounted to about 255,000 tons. At the end of 2024, Russia withdrew from some joint ventures producing uranium in Kazakhstan, selling parts of these assets to Chinese companies.

Rosatom sold those assets to focus on the much richer Russian-controlled Budenovskoye deposit in Turkistan province, where total explored uranium reserves, among the largest in the world, amount to at least 350,000 tons, said Nurlan Zhumagulov of Astana, director of the Energy Monitor think tank.

The true figure is as much as 800,000 tons, say former Kazatomprom executives.

Production volumes at the Budenovskoye deposit will grow rapidly: this year -- 1,300 tons of uranium, next year -- 3,750 tons, and in 2027 -- 6,000 tons.

Moreover, all uranium ore extracted in the next two years will be used to meet Russia's needs.

Kazakh uranium is useful to China as well.

China is the second-leading buyer of Kazakh uranium, after Russia.

In the first seven months of 2024, 46% of revenue from Kazakh uranium exports came from shipments to Russia, according to the think tank First Credit Bureau.

When exports are measured in kilograms rather than in monetary terms, 44% of Kazakh uranium exports went to China.

Some of the uranium goes to Europe.

China is seeking to strengthen its energy independence by relying on nuclear energy, say analysts. Beijing sees nuclear power as key to a stable energy supply.

Today, 55 nuclear reactors are operating in China. By 2035, Beijing plans to build more than 150 new nuclear reactors.

"Kazakhstan is becoming a key supplier of uranium for China in this process," said Ismagambetov.

Seeking a balance

Stronger Russian and Chinese influence in Kazakhstan's uranium sector could limit Astana's ability to make independent decisions about the nuclear industry, many analysts say.

Additionally, it runs the risk of secondary sanctions from the West.

The United States already has banned imports of Russian uranium. If Kazatomprom is perceived to be linked to Rosatom, exports of Kazakh uranium could suffer.

Kazakhstan is concerned about these potential risks as sanctions against Rosatom's management take effect, said Almas Chukin, economist and managing partner at Visor Kazakhstan, an investment firm in Almaty.

"Naturally, the Kazakh authorities really don't want sanctions to affect Kazatomprom, so they are trying to strike a balance and avoid an excessive Russian presence in the uranium industry," Chukin told Global Watch.

The sanctions have had an impact, albeit indirectly.

The war in Ukraine and the ensuing restrictions on Russia have obstructed the export of Kazakh uranium to Europe.

In an interview with the Financial Times last September, Kazatomprom CEO Meirzhan Yussupov said the traditional supply route through St. Petersburg is now unavailable, so Kazakhstan has been forced to look for alternative ways to deliver its uranium to Western countries.

In particular, it is considering a route via the Caspian Sea, Azerbaijan, Georgia, and Black Sea, despite the higher cost and complexity.

All Kazakh uranium could easily be sold either in China or Russia, but that kind of near-monopsony is not what Kazakhstan is striving for, said Yussupov.

"We don't want to put all our eggs in one basket," said Yussupov.

Another potential strategic uranium customer

Kazakhstan has another potential strategic uranium customer -- the United States.

Kazatomprom would like to increase uranium exports not only to Europe but also to the United States, said Yussupov.

Development of new areas at the Budenovskoye deposit is expected to boost production of raw materials.

The United States is the biggest consumer of uranium and its future demand for energy is likely only to grow with the rapid progress of artificial intelligence, which requires considerable amounts of electricity.

However, the United States mines little uranium because of high costs and low profits. Kazakh uranium is cheaper.

The United States should strengthen its partnership with Kazakhstan in the nuclear industry, the Center for Strategic and International Studies (CSIS) noted in a February brief.

The two countries have a foundation for close relations, according to CSIS.

"The United States was the first country to recognize Kazakhstan's independence, and the two nations routinely cooperate on non-proliferation issues," CSIS said.

Washington "should prioritize fostering industry partnerships, encouraging US investment in exploration abroad, and opening more avenues for engagement" with Kazakhstan and other uranium exporters, it added.