ARMZ: Expanding Global Presence Asia Mining Congress Singapore, March 2010
ARMZ in Russian Nuclear Industry
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What is ROSATOM?
ARMZ
Entire Nuclear Fuel Cycle: from uranium mining to power generation and spent fuel reprocessing 3
ROSATOM Global Presence
Finland, Sweden, Netherlands, Belgium, Germany, France, Spain, Switzerland, Hungary, Slovenia, Lithuania, Bulgaria, Czech Republic, United Kingdom, Slovakia
Russia, Kazakhstan, Ukraine, Armenia
ROSATOM Partners
USA, Canada, Mexico
Japan, China, Republic of Korea, Vietnam, India, Mongolia
.
.
Argentina, Brazil, Venezuela, Chile
Namibia, South Africa, Libya, Morocco, Algeria, Egypt
40 countries worldwide
.
Australia World share: uranium mining – 9%, uranium enrichment services – 40% nuclear fuel supplies – 17%, NPP construction – 16%
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ARMZ at a Glance Russia’s only uranium producer World’s 2nd by uranium resources - 546 thousand tU in 2009 World’s 5th by uranium output volume - 4624 tU in 2009 Priargunsky - world’s largest by aggregated historical uranium production Highly diversified by mining technology and geography - exploration and mining on 3 continents 14,000 employees at production sites and in service companies by Country 2009 Uranium Resources Thou tU
1400 1200 1000 800 600 400 200 0
by Country tU
566,3
2009 Uranium Production 14000 12000 10000 8000 6000 4000 2000 0
3,527
3562
Source: WNA
by Company (in situ)
by Company tU
Thou tU 2500 2000 1500 1000
546
500 0 Source: ARMZ
9000 8000 7000 6000 5000 4000 3000 2000 1000 0
4624
Source: ARMZ
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ARMZ Growth Rates 2006-2009 Production Growth Rate In 2009 50 40
25%
30 20 10 0
-10 -20
• 45% growth of uranium output over three years
• 25% growth in 2009 – second place worldwide
• 4-fold growth of uranium resources
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ARMZ: 2009 Highlights
March: ARMZ acquired Effective Energy N.V.: 50% in JV Karatau and 25% in JV Akbastau August: Rosatom and the Government of Mongolia signed an agreement establishing JV «Dornod Uranium» with ARMZ as operator for the Russian part June – December: The Government of the Russian Federation provided a subsidy of RUR62.4 billion from the federal budget to Rosatom to purchase ARMZ Uranium Holding Co. stock
November: ARMZ made a public offer to acquire 100% of Khan Resources Inc. to consolidate interest in the Dornod uranium project (Mongolia)
December: ARMZ completed transaction with Uranium One acquiring19,95% interest in the company 7
ARMZ Benefits From Deal With Uranium One
Acquiring interest and establishing partnership with strong public uranium producing company
Current uranium resource increase by 5%
JV ARGK (Armenia)
Uranium business geographical diversification and new uranium market opportunitiesNamibia (USA, Australia, JV Canada)
SWA Uranium Offtake option for greater of 50% of Karatau or 20% of aggregated Uranium One annual production secures additional amount of U beyond 2013
Canada JV NBUL
Technical, infrastructural and logistical synergies in Kazakhstan
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ARMZ – 2010 Plans
Uranium production • Construction of new mines in Russia • Ramping up of uranium production in Kazakhstan • Total volume of ARMZ uranium output in 2010 – over 5100 tU
Exploration and development of projects • Feasibility study of the Elkon mine • Bringing investors into ARMZ U projects in Russia • Exploration for new U deposits
Uranium market and M&A • New mid-term and long-term contacts for natural uranium supply • Participation in new promising assets overseas
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ARMZ 2010 Global Presence
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Operational and under construction facilities 1. Priargunsky 4. Akbastau 2. Khiagda 5. Zarechnoe 3. Dalur
Planned facilities 6. Elkon 7. Gornoe 8. Olovskaya
Exploration ventures and Prospective projects 9. Mongolia 10. Russia
11. Namibia 12. Armenia
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Asia and the Pacific: U Demand & Supply
Huge misbalance – to reach 95% in the foreseeable future - between demand for U by nuclear reactors and supply of locally produced uranium
Uranium required in 2030 (F): 40 thou tU
Uranium required in 2008: 15 thou tU
Locally sourced 900 tU
Locally sourced 2000 tU
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ARMZ Advantages
Unique Resource Base High Level of Experience and Expertise
Long-Term Development Plans
ARMZ Sustainable Uranium Demand
To ensure ARMZ competitiveness through building a diversified world-class mining company
Government Support
Diversified Projects 12
Nuclear Power in Asia and the Pacific NPP Uranium Demand Until 2030 Asia and the Pacific Today:
tU/y 250
Taiwan
200
274%
Vietnam Indonesia
150
Pakistan India
100
Korea China
50
Japan
109 NPPs (25% of world’s nuclear reactors) with the aggregate capacity of 82 GWe. Most of operating capacities located in Japan (53) and the Republic of Korea (20) 31 NPPs under construction (16 in China, 6 in India, 5 in the Republic of Korea).
0 2006
2007
2010
2015
2020
2025
2030
Asia and the Pacific in 20 Years:
IAEA,2007 (high scenario)
Fast growing nuclear power in Asia and the Pacific is an attractive market for uranium miners and utilities
274% growth in nuclear power capacities Aggregate capacity of operating NPPs in the region to reach 219 GWe. China and India projected to grow their nuclear power generation at greatest rates 13
Demand for Uranium in Asia and the Pacific tU/y
Change In Demand Structure
NPP Uranium Demand Until 2030
45000 Taiwan
40000 35000
Vietnam
204%
30000
Pakistan
20000
5200
Taiwan
5300
Vietnam
1200
Indonesia 10800
India
15000
Pakistan
Korea
10000
India 7940
China
5000
Korea 16000
Japan
0 2006
3200
Indonesia
25000
1930
830 445
2007
2010
2015
2020
2025
2030
Japan 2006
IAEA, 2007 (high scenario)
Today: Asia and the Pacific NPP demand for uranium at 15 thou tU/year Japan and South Korea are the largest consumers of uranium for NPPs
China
Within 20 years in Asia & the Pacific:
Producers and Consumers
India China Uzbekistan Russia Kazakhstan Taiwan India China Korea Japan
Threefold growth of NPP uranium needs to 41.6 thou tU/year Major growth rates expected in China (16-fold) and India (10-fold)
Producing countries in Asia (Kazakhstan, Russia, and Uzbekistan) capable of meeting growing demand
2030
-10000 10000
-5000 5000
0
5000
10000
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Asia’s Uranium Resource Base U Resources in Asia by Major Producers, as of 01.01.2008
Asia’s U Resource Base by Country, as of 01.01.07 (IAEA, 2007) 67,9; 4%
62; 3%
600
27,7; 2%
Kazakhstan
72,9; 4% 111; 6%
Russia Jordan
111,8; 6%
817,3; 45%
Uzbekistan India
545,6; 30%
China
500 400
546
501 349 358
300 200
165
192
100 0
Mongolia Other
Recoverable U resources in Asian countries total 1816.2 thou tU (33% of the world’s total)
Cumulative U resources (in situ) of the largest uranium producers operating in Asia total 1224 thou tU of which 33% is in Russia 53.5% is in Kazakhstan 13.5% is in Uzbekistan
Almost 50% of producer-attributable U resources in Asia fall within ≤$80/kg category, almost 33% fall within ≤ $40/kg category amenable to progressive and environmentally friendly In Situ Leach (ISL) recovery method
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Uranium Production in Asia
Uranium production in Asia by country, 2008
Uranium production forecast (2009 - 2030) and share of production in Asia tU/y
749; 5% 200; 1%
70000
45; 0%
60000 50000 Kazakhstan 2338; 15%
3521; 23%
Russia
8521; 56%
Other 40000
Uzbekistan
Uzbekistan
30000
Russia
China
20000
Kazakhstan
India
10000
Pakistan 0 2009
2010
2015
2020
2025
2030
WNA,2009 (reference case scenario)
Share of Asian production in the global U output averages 40-45% in 2009-2030, peaking in 2015. Kazakhstan remains the largest producer with its share averaging from 60 to 75% 16
Uranium Production-Consumption Balance in Asia 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 2009
2010
2015 Asian Production
2020
2025
2030
NPP Requirements
WNA,2009 (reference case scenario) Russia’s NPP requirements are not accounted for due to most of NPPs’ location in the European part of the country. Russia uses secondary sources to meet uranium requirements of domestic NPPs
Asia and the Pacific NPP requirements in 2009-2022 can be fully met by uranium produced in Asian countries (Kazakhstan, Russia, and Uzbekistan). Another two major uranium markets (North America and Europe), as well as historical relationships between sellers and buyers (long-term contracts, miner-utility alliances, etc.), make sure most of uranium produced in Asia has so far been channeled to Europe and the US. 17
Providing for Asia’s Future Needs For Uranium TVEL – Department of Atomic Energy, government of India
Russia
TENEX CNEIC
China
India Tenex – Chubu Electric
JV Irukol, JV Semisbai – CGNPC JV Jalpak - CGNPC
Kazakhstan
Japan
JV Appak - Sumitomo, Kansai Electric Power JV Baiken-U, JV Kyzylkum - Japanese holdings
Kazatomprom – Korea Hydro & Nuclear Power
Korea
Large quantities of natural uranium needed to meet the requirements of Asia’s fast growing nuclear sector make sure Russia’s share in the region’s uranium market will be expanding
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Thank you!