This story is part of an ongoing Forum on Energy series on nuclear energy in emerging markets across the globe. See more entries here.
Kazakhstan occupies a starring role in the history of nuclear energy. A legacy of the Soviet Union’s nuclear weapons-testing regime, Kazakhstan is the world’s most radioactive country, having hosted the notorious Semipalatinsk nuclear test site. However, it is also is the world’s largest producer of the uranium and possesses the world’s second largest-uranium deposits (after Australia).
Kazakhstan is also the only country on earth to have voluntarily given up nuclear weapons and is currently planning to construct its first nuclear power generating station in the post-Soviet era and a global nuclear fuel bank. While the nuclear legacy of Kazakhstan is long and storied, the next few years will redefine the country’s relationship to nuclear technology, as well as to its neighbors and allies.
Nuclear Power Development
A product of the Soviet-era, Kazakhstan’s only nuclear power plant, the BN-350 nuclear reactor at Mangyshlak, operated for 26 years before being shutdown in 1999 and decommissioned in 2001. Though the plant was fully operational it contributed little to Kazakhstan’s energy supplies and was mostly used to power desalination facilities located on the shores of the Caspian Sea.
However, in recent years, Kazakhstan has taken steps toward construction of a new state-of-the-art facility. Initially proposed in 2003, with a target completion date of 2018, the plant was supposed to be a Russian-manufactured VBER and was to be constructed on the shores of Lake Balkash in the Karaganda region of central Kazakhstan. The project stalled due to funding shortfalls and alleged Russian reluctance to transfer the necessary intellectual property. The effort was re-launched in 2009 with Aktau identified as the most likely site for the new reactor. The new location is near the site of the decommissioned BN-350 nuclear reactor. Kazatomprom, the government-owned nuclear industry company which will be the owner of the plant, will soon solicit bids for plant construction. Kazatomprom has stated it envisions the construction two VBER-300 reactors.
Current installed production capacity is between 19.5 and 20 gigawatt hours, 81 percent of which is coal fired, 8 percent from gas, and 8 percent from hydropower. However, by 2030, power needs are expected to grow to more than 150 billion KWh per year. In order to meet growing demand, the Kazakh government expects investment of $37 billion into power generation, in addition to $9.5 billion to be invested in upgrading power systems and $16.9 billion to be invested into regional energy companies. As a result of these investments, nuclear power is expected to make up roughly 4.5 percent of energy production by 2030. Under the 2030 plan, the proposed reactor at Aktau will be joined by at least one other significant nuclear generation site (possibly a Japanese Boiling Water Reactor near Lake Balkash) and some 20 or more small reactors each of 50-100 MWe to supply power to isolated communities. The National Nuclear Centre (NCC) has announced the first one of these will be constructed in Kurchatov.
Kazakhstan, under the auspices of the NCC, operates six research centers and a number of research reactors. These centers, and many other remnants of the Soviet nuclear research facilities, contribute significantly to Kazakhstan’s highly-developed brain trust of nuclear experts and technicians.
Kazakhstan, with over 12 percent of the world’s uranium reserves, has been mining uranium since 1948 and is the world’s largest producer. In 2013, Kazakhstan produced roughly 22,500 tons from 17 mine projects, or roughly 38 percent of global output. In 2013, exports totaled 23,400 tons. Nearly all the country’s mining operations employ in situ leach mining. Kazatomprom, which owns five of the 17 mines outright and 12 others in joint venture with foreign equity holders, produced 12,600 tons, or roughly 21 percent of the world total.
In recent years, production increases have been significant. Between 2001 and 2011, production rose from 2,022 tons per year to 19,450 tons per year. Current capacity is around 25,000 tons per year and although mine development has continued, in 2011 Kazatomprom announced a cap on production of 20,000 tons per year, which has since been exceeded.
Nuclear Fuel Cycle
For more than 50 years, Kazakhstan has produced unenriched uranium yellow cake for export. In fact, 100 percent of Kazakh uranium production is exported. Most of the exported product is initially refined at the internationally-significant Ulba Metallurgical Plant in the east of the country before being shipped to Russia, China, the United States, Japan and destinations. The Ulba plant, which has been in operation since 1952, is one of the world’s largest producers of uranium hexafluoride. Since 1973, Ulba has produced nuclear fuel pellets from Russian-enriched uranium for export to nuclear power plants worldwide. Ulba is also at the center of other numerous joint ventures and produces a variety of both unenriched and fuel products.
In 2008, a joint venture was signed with Cameco to construct a new 12,000 tons/year uranium hexafluoride conversation plant on the Ulba site. The plant would be expected to supply existing Kazakh-Russian joint ventures. Construction was to start in 2009, but has been delayed. The project has since been scaled down to 6,000 tons/year and is scheduled to begin construction in 2018.
First announced in 2008, Kazakhstan and Kazatomprom are in the midst of a push to increase production of uranium and uranium products and shift up the value chain toward nuclear fuels and pellets. By 2015, Kazatomprom, through domestic production and processing as well as joint ventures both at home and abroad, aims to supply 30 percent of the world’s uranium, 12 percent of the uranium conversion market, 6 percent of enrichment and 30 percent of fuel fabrication. Much of the initial production is targeted at the Chinese market, but Kazatomprom has also begun supplying French reactors with fuel pellets and is looking into supplying fabricated fuel for Westinghouse reactors, of which Kazatomprom is a 10 percent owner.
Global Nuclear Fuel Bank
In 2012, Kazakh President Nursultan Nazerbayev proposed constructing a global low-enriched uranium (LEU) fuel bank at the Ulba site in eastern Kazakhstan. A central tenant of Kazakhstan’s foreign and nuclear policy, the push to host an IAEA-approved fuel bank is the most advanced of the numerous similar international proposals. Kazakh government officials often cite the country’s long track record of working with nuclear fuels, the plethora of existing nuclear infrastructure, and their long-standing commitment to nuclear non-proliferation as factors supporting the initiative. The IAEA is said to be considering the proposal but has expressed reservations due to seismic considerations and local opposition to the site. Other concerns include the territorial legal status of an LEU Bank within Kazakhstan.
Kazakhstan has signed numerous agreements with many different countries in varying sectors of the nuclear energy economy, including waste management; research and development; weapons clean-up; non-proliferation; mining; fabrication; enrichment; academic exchange; nuclear power plant construction; conversion; and marketing.
Selected international partnerships include:
- Russia — In July 2006, Russia and Kazakhstan signed three joint venture agreements totaling $10 billion for nuclear reactors, uranium production and enrichment. In 2011, Russia and Kazakhstan extended the 2006 agreement to include uranium exploration and to facilitate Russian assistance in developing a Kazakh nuclear power plant.
- Japan — Since 2006, Kazakhstan and Japan have signed numerous international agreements relating to uranium supply and technical assistance with fuel cycle developments and nuclear reactor construction. In February of 2013, Marubeni and Japco signed a MOU with the National Nuclear Centre of Kazakhstan to examine the feasibility of constructing a Japanese boiling water reactor on the shore of Lake Balkash. The MOU outlines cooperation on project development; human resources development; feasibility studies; and the construction and operation of a nuclear power plant.
- China — China is both an investor in Kazakh mining ventures and a purchaser of Kazakh uranium, as well as a potential investor in future Kazakh nuclear power plants and a technology partner for Kazakhstan’s push to move up the uranium production curve. Kazatomprom has signed multiple agreements with Guangdong Nuclear Power Holdings Group and the China National Nuclear Corporation.
- Toshiba — In 2007, Kazatomprom purchased a 10 percent share in Westinghouse from Toshiba. The new investment strengthened both Toshiba/Westinghouse’s connection to Kazakh upstream supplies and Kazatomprom’s connections in fuel fabrication. Following this agreement, Toshiba established a nuclear energy institute in Kurchatov, near the Semipalatinsk nuclear test ground. The institute focuses on skill development in the fields of nuclear fuel cycle research and reactor technology.
Kazakhstan and Kazatomprom also have developed relationships with India, South Korea, Canada’s Cameco, France’s Areva and others.
As Kazakhstan expands its footprint in the global nuclear arena, opportunities for outside investment will grow. Kazakhstan has proven itself willing to engage foreign companies and governments in joint ventures and information sharing agreements in nuclear power, nuclear fuels, mining, nuclear technology, decontamination and enrichment. In order to achieve both its 2015 and 2030 goals for the nuclear industry, Kazakhstan will need in initiate additional joint ventures and acquire additional foreign technology, financing, and nuclear know-how.