(Yicai Global) April 23 -- CGN Mining, a unit of China General Nuclear Power, plans to acquire a 49 percent stake in a uranium miner in Kazakhstan for USD435 million to ensure supply of the fuel used in atomic power plants.

CGN Mining will buy the stake in Ortalyk from Kazatomprom, the world’s largest natural uranium producer, the Hong Kong-based company said in a statement today. The stake will allow CGN Mining to ensure cumulative package sales of uranium compounds of at least 20,000 tons in the next two decades. 

International prices of uranium are at their lowest since 2007, making this a good time to buy, the Chinese mining company said, adding that prices are expected to rise as global low-cost uranium resources are gradually depleted over the next five to 10 years.

Upon completion of the deal, CGN Mining’s estimated share of uranium compound resources in Kazakhstan will increase to 43,000 tons from about 23,000 tons. The firm also invested USD133 million for 49 percent of Kazakh uranium miner Semizbay-U in 2014.

The latest deal is part of a cooperation package CGN Power signed with Kazakh parties including Kazatomprom in December 2015. They agreed to form a joint venture in Kazakhstan to supply CGN Power with uranium fuel assembly products while CGN Mining would also invest in a uranium mining unit under Kazatomprom to secure raw material supplies.

Kazakhstan, which is geographically close to China, is the world’s largest producer of uranium. Kazatomprom’s production accounted for about 22 percent of world’s total in 2019, according to data from the World Nuclear Association.

CGN Mining [HKG:1164] closed unchanged at 65 Hong Kong cents (8 US cents), after earlier climbing as much as 4.6 percent.

Editor: Tom Litting