Uranium One Group of Companies Reduced its Cost Figures and Boosted Foreign Earnings based on the Results of 2016
Uranium One, an international mining division of Rosatom State Corporation, summed up the operating and financial performance of the division in 2016 according to the management reports. Based on the results of 2016, the division's mining companies reached the production target at the level of the previous year—the total uranium production amounted to 4,919 tons. The cash cost of uranium sold decreased from $12 to $9 per pound of U3O8 as compared to 2015 (primarily, due to the reduction of production cost at joint mining ventures in Kazakhstan from $9.7 to $6.4 per pound respectively). With the division's total earnings of $570 million in 2016, the share of foreign earnings reached $325 million, which is 34% higher than the previous year. The operating revenue at year-end amounted to $180 million. In order to reduce the expenses and to control uranium production costs, the division has been implementing a production efficiency programme. Reaching the targets of the programme in 2016 made it possible to reduce the company’s operating expenses by more than $10 million due to new approaches to the construction of production wells, innovative practices of performing maintenance and repair works at the wells, commissioning of new energy efficient equipment, autonomous heating and lighting systems, optimizing freight forwarding expenses and reducing the cost of purchasing supplies and materials. "In the current situation on the market, that is a continuous stagnation of the global uranium market, special attention is given to the company's competitiveness and leading positions in terms of production efficiency among the world’s uranium production companies," said Vasily Konstantinov, the President of Uranium One Group. “However, the existing market conditions require a flexible approach to production planning, including a reduction of the production level at some uranium mines in Kazakhstan in 2017. This approach will be implemented in partnership with Kazatomprom, provided that all licenses and contractual terms are strictly met and no contractual obligations undertaken by our company are affected. In 2017, we plan to maintain the positive dynamics of growth in the major economic indicators, and will continue to increase the share of foreign earnings due to enhancing business operations in the markets that are both traditional and new for our company”.