In Russia-U.S. Uranium Split, an Opportunity for Kazakhstan
With the new U.S. ban on Russian uranium imports, Kazakhstan may have an opportunity. But the tyranny of geography is not so easy to overcome.
On May 13, U.S. President Joe Biden signed into law a bill prohibiting the import of low-enriched uranium from Russia. The passage of the bill also unlocks $2.72 billion in federal funding, which Congress appropriated – contingent on the ban on Russian imports – to support domestic production of low enriched uranium (LEU) and high-assay low-enriched uranium (HALEU).
The ban on Russian LEU, some analysts note, presents an opportunity for Kazakhstan. While Russia may be the world’s leading exporter of enriched uranium, Kazakhstan hosts one of the world’s largest reserves of uranium and is the world’s top producer. As the United States seeks to on-shore enrichment, Kazakhstan has an opportunity to play a part – but circumventing Russia will be difficult.
In a recent report for the Caspian Policy Center, research assistant Charley Ward outlined Kazakhstan’s opportunity and the very real hurdles to seizing it.
Despite Kazakhstan’s extensive mining of uranium, the country does not possess significant enrichment capabilities. In fact, Kazakhstan hosts a International Atomic Energy Agency (IAEA) LEU bank for the explicit purpose of limiting the development of enrichment capabilities in member states. The IAEA LEU Bank, located at the Ulba Metallurgical Plant in Oskemen, Kazakhstan, encompasses 90 metric tons of LEU to be used in case of supply disruptions.
As Ward writes in the CPC report, “If Kazakhstan is to become a beneficiary of the U.S. ban on Russian uranium, officials need to find a way to circumvent Russian enrichment facilities and transport routes.”
This is where that $2.72 billion comes into play. U.S. enrichment infrastructure has dwindled from three plants constructed in the 1940s and 1950s before being decommissioned in the 1990s. Until 2023, the only operating enrichment plant in all of North America was located in Eunice, New Mexico – run by a private company, Urenco, a British-German-Dutch nuclear fuel consortium. In October 2023, an American company, Centrus Energy, began operations at a plant in Ohio that produces HALEU. While HALEU is currently only in used in research reactors and medical isotope production, small modular reactors (SMR) currently under development will require it too.
As U.S. enrichment capacities dipped, Russia surged into a market-leader. Russia’s enrichment capacity far outstrips the rest of the world, and Kazakhstan’s trade routes conveniently feed the beast. As the United States seeks to shift the market, Kazakhstan will need to reorient its uranium trade routes away from Russia. The Middle Corridor, a hot topic in its own right, is one option.
Ward posed a good question, however: “Provided the West expands enrichment capacity and helps streamline the Middle Corridor, Kazakh uranium could help replace Russian nuclear fuel. But geopolitically, could the United States really supplant Russia with a post-Soviet neighbor?”
Russia’s state nuclear company, Rosatom, has a considerable presence in Kazakhstan’s uranium mining industry. Ward noted, for example, a Rosatom purchase in 2022 of a 49 percent state in the Budenovskoye uranium field in southern Kazakhstan. While Kazakhstan’s state nuclear company, Kazatomprom, remains dominant, the geography of the problem is impossible to alter.
Kazakhstan’s other main neighbor, China, is also a top customer – and also at odds with the West. As Ward wrote: “...for the United States, switching from Russian to Chinese supplies would be swapping one geopolitical competitor for another. In an era of economic decoupling, it is highly unlikely that U.S. policymakers would endorse a U.S.-China alliance on nuclear fuel.”
The ban on Russian LEU imports is set to take effect on August 12. The law includes a waiver clause, in cases where no alternative source is available. It’s yet to be seen how many waivers will be issued, but on the surface it seems obvious that there will be waivers. Russia, meanwhile, may decide to ban exports to the United States itself, cutting off supplies regardless of any waivers granted.
It’s a dangerous game of uranium chicken.
In concluding the CPC report, Ward noted, “For Washington, a ban on Russian nuclear fuel without an alternative source of replacement fuel seems premature.” He went on to suggest “supporting Kazakh efforts to build its own conversion and enrichment plants, reducing its dependence on facilities in Russia and China.”
In the coming months, it’ll be critical to watch Kazakhstan-U.S. engagement – already intensified amid the war in in Ukraine – as Astana seeks to take advantage of the opportunity opened by the U.S. ban on Russian LEU imports.