Kazakhstan, the world’s largest producer of uranium, is increasing its mining tax on the nuclear fuel by at least 50% next year.

The central-Asian country is to raise the rate to 9% from 6% starting Jan. 1, according to state mining company Kazatomprom (LSE: KAP). Then in 2026, a graduated structure based on output would see the tax rate increase to 18% for more than 4,000 tonnes of uranium concentrate U3O8 produced and as little as 4% for less than 500 tonnes, the miner said July 10.

An additional rate of 0.5% is to be charged if market prices are more than $70 per lb., to as much as 2.5% more at greater than $110 per lb., Kazatomprom said. The government introduced the measures July 1, the miner said.

The price of uranium was at $86.15 per lb. on Monday, according to Trading Economics. The heavy metal’s price roughly doubled to $106 per lb. in January from last July.

Low level

The country’s tax rates are among the lowest in the world and can be raised by 10-20%, economy minister Alibek Kuantyrov said at the time, according to Brussels-based Nucnet news agency.

Shares in Kazatomprom fell 5.6% to close at £37.80 apiece on July 10 before recovering to end Monday at £39.70 for a market capitalization of £7.9 billion.

Stock prices in uranium producers besides Kazatomprom generally rose after the tax announcement on concerns of supply disruptions in the leading producer after it already reported a shortage of sulphuric acid to process ore.

Cameco (TSX: CCO; NYSE: CCJ) also has exposure to Kazakhstan via its Inkai joint venture with Kazatomprom. The Canadian miner holds a 40% stake in the in-situ recovery mine. Shares in Cameco closed on Monday in Toronto at C$71.40 apiece, up 6.8% from C$66.83 on July 9 before the tax announcement. Its market value is C$31 billion.

The $5.7 billion Sprott Physical Uranium Trust (TSX: U.U for USD; U.UN for CAD) gained 2.8% to Friday’s close at $27.93 from $27.17 on July 9. It slid to close at $27.20 on Monday.

Kazakhstan’s 21,227 tonnes of uranium in 2022 led global output, according to the World Nuclear Association, an industry booster. Kazatomprom produced 11,373 tonnes or 23% of world production that year.

Source: MINING.COM