Uranium stocks and ETFs are rising on Thursday after Canadian producer Cameco (CCJ) said output from its Inkai joint venture in Kazakhstan was unexpectedly halted due to a lapse in authorization from the government. CCJ stock rose modestly, but other uranium plays caught a bid, with the Sprott Uranium Miners ETF (URNM) jumping.
Cameco has a 40% stake in the Inkai joint venture with state-run Kazatomprom. Inkai was expected to produce 7.7 million pounds of uranium in 2024, of which 2.3 million pounds had been delivered to Cameco, according to its Nov. 7 third-quarter earnings report. That's a bit more than 10% of Cameco's expected full-year output of 23.1 million pounds.
In other nuclear-related news, Constellation Energy (CEG) announced a 10-year, $840 million contract with the U.S. General Services Administration to supply nuclear power to federal agencies. That provided added fuel for uranium stocks, as well as boosting nuclear stocks.
↑ XCameco announced Thursday that Inkai had suspended activity as of Jan. 1. The company said that, based on information provided as recently as Dec. 26, it had expected an extension of the project to be granted by the Ministry of Energy.
"We are disappointed and surprised by this unexpected suspension and we will be seeking further clarification on how this transpires, as well as the potential 2025 and 2026 production and financial impacts (including on future dividends)."
The incident raises questions about the reliability of Kazakhstan, both as a partner for Cameco and as a uranium supplier more broadly. The implications could be significant. Kazahkstan is the world's biggest producer, providing 43% of world supply in 2022, according to the World Nuclear Association.
Russian President Vladimir Putin visited Kazakhstan on Nov. 27 and discussed boosting energy ties. Voters in Kazakhstan backed a referendum in October to build the country's first nuclear power plant. Russia is among a number of countries that have expressed interest in participating in the project.
Despite the cloud of uncertainty over its Kazakhstan joint venture, CCJ stock rose 1,1% in Thursday's midday stock market action.
However, other nuclear mining plays got more of a boost over the potentially concerning development for future uranium supply.
The URNM ETF jumped 6.4%. The Global X Uranium ETF (URA) rose 4.9%. The VanEck Uranium and Nuclear ETF (NLR) added 3.7%.
Among individual uranium stocks, Uranium Energy (UEC) surged 10.3% and NexGen Energy (NXE) 12.1%.
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