Uranium: Expanding Global Presence ARMZ Uranium Holding Co., Russia Vadim Zhivov, Director General INDABA, February 2009
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ARMZ In Russian Nuclear Industry ARMZ • • • •
Energoatom
Uranium mining and supply
Worldwide mining and exploration World’s #2 in uranium resources World’s #5 in uranium production
Rosatom
• Uranium enrichment,
• Nuclear power plant
operation, generation and sales
Tenex export sales
Full nuclear fuel cycle, NPP construction, power generation
• 40% of world’s uranium enrichment capacity
TVEL • Nuclear fuel fabrication, export sales • 17% or world’s nuclear fuel market (every 6th reactor) 2
ARMZ: successor to the largest uranium mining complex created by the USSR Historical uranium production USSR
•
producer in the 1980’s – up to 15,5
World record 15,5Kt
18000
thousand tons/year
16000
•
14000
USSR
-
world’s
largest
uranium
resources: 1,700 thousand tons (incl.
USSR
12000
USSR - the world’s largest uranium
Russia’s 546 thousand tons)
10000 8000
6000
•
Cumulative U production: 365,7Kt
4000 2000
Widest geography – mining in all republics
of
USSR,
countries
of
Eastern Europe, Mongolia, China , etc. 1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
1964
1962
1960
1958
1956
1954
1952
1950
1948
1946
0
•
All known uranium mining methods
•
USSR
and
USA
simultaneously
developed the most effective mining method – in-situ leach
3
ARMZ Today 2008 Uranium resources, thous. tons (in-situ) Paladin Energy 2% VostGOK 3%
Others 11%
Navoi 3% Uranium One 4%
BHP Billiton 33%
Kazatomprom 7%
•
2nd in uranium resources
•
5th in uranium production
•
Russia’ s only uranium mining company
•
ARMZ owns Priargunsky - the world’s largest mine as for aggregated historical U production - over 130 thousand tons of uranium
•
Highly diversified by mining technology and geography – Russian miners use all known uranium mining methods – Exploration and mining projects in 3 continents 14 thousand employees in production sites and service companies
Cameco 7% ARMZ 538 11%
Rio Tinto AREVA 9% 10%
2nd place
2008 Uranium production, tons CAMECO 16% AREVA 16%
Rio Tinto 18%
• Kazatomprom 11% Others 13%
Paladin Energy 2% Uranium One 3%
BHP Navoi Billiton 8% 5%
ARMZ 3687 8% 5th place
4
ARMZ Growth Results 2006-2008 Priargunsky
Zarechnoe
Dalur
Operational and under construction facilities
Khiagda
Planned mines
Tons
Exploration ventures and new projects
Management and service companies
4000 3000 2000
3190
3527
3687
2006
2007
2008
1000 0
2006
2007
2008
• Number of subsidiaries and projects increased from 4 to 18
Thou tons 700 600 500 400 300 200 100 0
• 18% growth of uranium output in two 538
• 4-fold growth of uranium resources • 16 uranium deposit licensed • New joint ventures set up to mine, drill
145 2006
years
2007
2008
and explore for uranium in Russia and abroad, new management and service companies in operation 5
ARMZ Steady Development Through Financial Turmoil
?
?
•
Strong demand for ARMZ’s uranium is guaranteed by long-term contracts with Rosatom nuclear companies
•
Business of strategic importance, ARMZ enjoys support of its majority stakeholder – Rosatom
•
First-class borrower: debt financing fully backed by assets
•
Superior technologies and expertise make ARMZ a partner welcome globally
•
Most of uranium is sold through longterm contracts insensitive to shortterm market fluctuations
What should we do?
!
! ARMZ has the answer: Uranium Mining!
6
ARMZ Production Outlook
ARMZ uranium production capacity
20000
•
ARMZ plans to ramp up mines’ uranium production capacity to 20 thou tons per annum by 2025
•
Major part of required financing will be raised in financial markets and/or contributed by strategic investors
18000 16000 14000 12000 10000
8000 6000 4000 2000 2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
0
7
ARMZ Global Presence
11 10
2
3
8
14
5
6 7
1
9
4 13
12
Operational and under construction facilities 1. 2. 3. 4. 5.
Priargunsky Khiagda Dalur Akbastau (Karatau) Zarechnoe
Planned facilities 6. Elkon 7. Gornoe 8. Olovskaya
Exploration ventures and Prospective projects 9. 10. 11. 12. 13. 14.
Mongolia Canada Russia Namibia Armenia Ukraine
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Why Africa?
tons/year
Uranium Production in Africa/ South Africa
Uranium exploration results in Africa
Source: OECD / IAEA Red Book - 2007
•
Large cumulative uranium production – 400 thou tons, 17% of world total
•
Significant uranium resources – 19% of world’s total (1044,7 thou tons)
•
High potential for increasing uranium resources – about 50% growth resulting from exploration in last 2 years
•
High potential for new uranium deposits discovery
•
Effective methods of uranium mining – open-pit, heap-leach, and, possibly, in-situ leach
•
Favorable climate and investment policy
9
ARMZ Uranium Project Preferences Mine technical and economic preferences
• • • •
Geological favorability for exploration
• Potential uranium resources > 10 thou tons • Favorability for sandstone type mineralization
Country political and economic aspects
Infrastructural preferences
Mine production capacity > 700 tons a year Identified uranium resources > 10 thou tons Open pit or ISL mining method Production cost < $80/kg
• Government support for uranium exploration • Stable political, economic, and financial situation • Developed mining industry • Existing infrastructure • Water supply • Favorable climate
10
Where in Africa?
2
•
ARMZ developed a database on uranium deposits and occurrences in Africa
•
ARMZ, being a state-owned company, cooperates with governmental, investment, mining, and exploration organizations
•
Uranium mining countries with high U potential - Namibia, Niger, South Africa
•
A few countries susceptible to exploration for uranium
2
1 3
JV SWA Uranium Mines Established in 2008 for uranium exploration in Namibia
1 3
The JV partners are ARMZ, VTB Capital Namibia and Arlan Investment Co. 11
ARMZ Contribution to Africa •
Bringing investments into African mining sector
•
Infrastructure development in regions for potential uranium sites
•
Additional tax proceeds for national budgets
•
Modern environmentally friendly technologies of uranium exploration, mining and processing
•
Creating new jobs
•
Unique new expertise for Africa’s mining industry
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Why Mining INDABA 2009? • ARMZ formal introductions to African mining community
• Voicing
ARMZ plans for Africa
uranium-related
• Meeting colleagues and building relationships with government bodies, exploration and mining companies, financial institutions
• Sharing
news and views uranium-related activities
in
ARMZ is open to partnership in uranium exploration and mining in Africa 13