In the spring, NNEGC Energoatom signed a contract with the Canadian holding Cameco on the use of Ukrainian uranium in the production of fuel for nuclear power plants in Ukraine. And just the other day, Energy Minister German Galushchenko rejoiced at plans to establish a joint production of nuclear fuel in Ukraine with Westinghouse starting in 2024 and destroy Russia’s monopoly in this segment. Lots of plans! But so far it has only been possible to qualitatively destroy uranium mining in Ukraine.
The situation is well illustrated by the fact that strikes by workers at the only uranium producer, the Eastern Mining and Processing Plant (Kirovograd region), which began back in 2020, are still relevant today. Literally in July, another shift refused to go underground. The reason is delays in salary payments, reaching up to six months. At the same time, according to NAEC, there definitely should have been enough money for salaries before last year’s collapse in production, but... it did not reach the miners. In general, this is a good reason for at least an internal audit, and ideally for an investigation, but... as always. As a result, it was the miners' strikes, and not the war, that led to a real disaster in the production of the mining and processing plant's marketable product - uranium oxide. It fell several times.
Ukraine needs 2.35 thousand tons per year for nuclear power plants. Approximately 170 tons for each million-plus reactor. Even half of this has never been mined.
Traditionally, the mining and processing plant produces approximately 800 tons. The figure has remained virtually unchanged for decades. Although plans to double and triple it are enough to cover the facades of both NAEK and the Ministry of Energy
Even when in 2014-2016 there was an increase of two to three hundred tons, in the end it turned out that this was a scheme for the purchase of cheap Kazakh uranium, which was then resold at an expensive price to the native state (the price of uranium was subsidized).
Naturally, the workers were not happy about this, and as a result, their patience ran out. They started blocking roads, organizing pickets in Kyiv, and so on. The plant stood idle for several months. If in 2020 production was 744 tons, then in 2021 it was almost 300 tons less.
850 tons were cheerfully planned for 2022.
And then came the big war, and at the end of the year the plant produced a measly 120 tons.
The trends are the same this year.
At the same time, no production means no money.
They are trying to solve the problem (for the fifth year now) by merging the mining and processing plant with Energoatom as a separate division. At first, NAEC openly fought back with all its paws, publicly declaring that it did not need such happiness. And that they “are not just a cash register that gives money. Their uranium concentrate is more expensive than in other countries. At the same time, you need to pay advance payments and receive nothing for it.”
Over time, public resistance ceased, but nuclear workers noted with poorly concealed satisfaction that NAEC’s external creditors, the EBRD and Euratom, were also against such a merger. The question is stuck. There was talk about transferring mining and processing plants to management. By the way, this is the fourth manager there in the last three years.
On the eve of the war, at the end of 2021, the issue came up at a meeting of the National Security and Defense Council of Ukraine, as a result of which a new plan emerged, a little more adequate compared to previous plans.
It consisted of the following: to concentrate on the new Novokonstantinovskaya mine (which they have been trying to develop “at the very least” in recent years), and at both old mines (Smolinskaya and Ingulskaya) to develop the remaining reserves and close these enterprises. The first in 2023, the second (located in the very regional center) - in another five years. This means two to three thousand jobs, a lot of social issues, and most importantly, this is a death sentence for the Eastern Mining and Processing Plant in its current form.
And then a full-scale invasion and arrivals in Kropyvnytskyi began. And the issue generally went out of focus in Kyiv.
The Smolinskaya mine was quietly closed in February of this year, switching to dry conservation mode. Plans to repurpose the site (projects ranging from the construction of a nuclear fuel plant to the extraction of lithium and uranium from neighboring deposits were proposed) ultimately remained on paper. Something is still moving on Ingulskaya, but the situation is critical. The promising Novokonstantinovskaya mine also does not pay money.
To be honest, when you read about sinister plans to bring the plant to bankruptcy, it becomes sad. There is no point in going bankrupt there for a long time. There is a phrase “lost by naval means.” That's just about the Eastern Mining and Processing Plant.
So, all that remains is to divide the cream and the roots. Energoatom (and the Ministry of Energy) frankly say that they are completely uninterested in taking two mines for closure. The costs of decommissioning the Smolinsk mine were previously estimated at one billion hryvnia for five years. By the way, I have seen few more expensive missile defense projects. The withdrawal of Ingulskaya will cost much more.
Naturally, all these expenses will be gladly transferred to the state budget (more precisely, to the state enterprise “Barrier”). Fortunately, there was already a successful experience of getting rid of the Chernobyl nuclear power plant (it was also safely pushed out of NAEK).
So the plans are extremely simple: assets are divided into liquid and... not so liquid. In the Kirovograd region, these are the half-built Novokonstantinovskaya mine, the unloading and reloading complex and the transport workshops of the closed Ingulskaya mine.
In the Dnepropetrovsk region (in Zhovti Vody) there is a hydrometallurgical plant and a sulfuric acid workshop. Perhaps they will also take over the mechanical repair plant.
And everything that remains can be hung on a nail or on the state budget.
From a commercial point of view, everything is undoubtedly correct and is doomed to support external creditors. Moreover, the debt of mining and processing plants to nuclear workers is virtually hopeless - it is about 3 billion UAH. At the same time, it is at the expense of nuclear energy that tariffs for the population are now subsidized, and this is already tens of billions of hryvnia...
In general, the debts of the plant (except for the nuclear power plant, there are both the State Reserve and private owners) even before the war exceeded the volume of its annual revenue. Now and even more so. It is clear that the lion's share of them will have to be written off (in the case of NAEC, they can be converted into property, to other creditors - a big greeting). But an analysis of how they were formed (with full name and specific “merits”) is still useful, so as not to simply start a new cycle of their formation.
Perhaps, indeed, a terrible end is better than endless horror... But there are nuances - people and, in fact, uranium itself.
People are actually shown the door, which has practically already happened at the Smolinskaya mine. Not only were they not given compensation, they also did not pay their salaries. How they will live later, where they will work in a village of nine thousand inhabitants, no one cares.
What about uranium? Plans to produce 1,500 tons at the Novokonstantinovskaya mine by 2027 will be adjusted again after the disastrous figures of these two years. Enough already?
It is finally worth deciding whether the country needs its own uranium.
The tales that we are about to reach full security are tired. Go out at least halfway (just don’t forget about the Zaporozhye Nuclear Power Plant). It's difficult, but possible. Moreover, Novokonstantinovka has a chance to extract uranium at prices comparable to world prices.
At the beginning of 2022, NAEC also spoke about “preparing meetings of Vostok Mining and Processing Plant with Western companies - leaders in the uranium mining industry to attract modern experience and possible investment support.” It is clear that then it was February 24 and somehow there was no time for investment. But it’s worth returning to the topic. Ukrainian private traders have also already made test “approaches to the projectile”, unfortunately, without impressive results, but it can be repeated.
The state also needs to decide. For many years they have been saying that Novokostantinovka needs money for the launch complex. At first it was about a billion hryvnia. Now the amount has increased to two. If we continue to hesitate, we will talk about three. But if we really need uranium, then production will have to be developed, there will be no miracle.
In high offices, everyone is calm; the Canadians from Cameco have committed to fully satisfy Energoatom’s needs for uranium raw materials during 2024-2035, supplying it and uranium conversion services for all nine reactors of the Rivne, Khmelnytsky and South Ukrainian NPPs. Six reactors of the occupied Zaporozhye nuclear power plant are not on this list, but (after de-occupation) supplies are provided for it as well. Apparently, Energoatom forgot about the second agreement with Cameco, which stipulated that NAEK would sell to Cameco all the uranium produced in Ukraine by VostGOK, but there is nothing to sell yet. Of course, the Canadians will find other uranium to fulfill the contract. Only in the original version did our mining enterprise receive an “anchor” order and profit, but someone else will make money.
Let’s just clarify: is it really government policy to destroy our own resource base in order to buy imported goods? Wouldn’t a project with Westinghouse need Ukrainian uranium? And in general, doesn’t a country need uranium in which half of the generation is nuclear power plants?
