Kazakhstan, the top producer of uranium, raised taxes

Kazakhstan, the world's largest producer of uranium, will raise the tax on nuclear fuel extraction by at least 50% next year.

According to the state-owned mining company Kazatomprom (LSE: KAP), this Central Asian country will raise the tax rate from 6% to 9% from January 1. Then, in 2026, the mining company announced on 7/10 that due to a gradual structure based on production volume, the tax rate would be raised to 18% when the production volume of uranium concentrate U3O8 exceeds 4,000 tons, and to only 4% when it is less than 500 tons.

According to Kazatomprom, if the market price is $70 or more per pound, an additional rate of 0.5% will be charged, and if the market price is $110 or more, an additional rate of 2.5% will be charged. The government introduced the measure on July 1, the mining company said.

According to Trading Economics, the price of uranium was £86.15 on Monday. The price of this heavy metal rose to 106 dollars in January, about double that of July last year.

According to the Nucnet news agency headquartered in Brussels, the tax rate for Kazatomprom is the lowest in the world, and Economy Minister Alibek Quantilov stated at the time that it is possible to raise it by 10 to 20%.

Kazatomprom's stock price fell 5.6% on 7/10 and closed at 37.80 pounds per share.

Stock prices of uranium producing companies other than Kazatomprom generally rose after taxes were announced due to concerns about supply interruptions at major production companies after Kazatomprom reported a shortage of sulfuric acid to process ore.

Cameco (TSX: CCO, NYSE: CCJ) also has exposure to Kazakhstan through an Inkai joint venture with Kazatomprom. This Canadian mining company holds 40% of in-situ recovery mining shares. Cameco's stock price closed at 71.40 Canadian dollars in Toronto on Monday, up 6.8% from 66.83 Canadian dollars on 7/9 before the tax system was announced. The total market value is 31 billion Canadian dollars.

The 5.7 billion dollar Splot Uranium Spot Trust (TSX: USD is U.U, CAD is U.UN) rose 2.8% from $27.17 on 7/9, and the closing price on Friday was $27.93. The closing price on Monday was $27.20.

According to the World Nuclear Association, which boosts the industry, Kazakhstan's 2022 uranium production volume was 21,227 tons, leading the world's production. Kazatomprom's production volume in the same year was 0.01 million1373 tons, accounting for 23% of world production.