The Kazakh Nuclear Gamble

This fall Kazakhstan will hold a national referendum on whether to build a nuclear power station. The multi-billion dollar project has long been pushed by Russian President Putin, with no clear support or rejection from the Kazakh side. Either outcome of the referendum will carry significant risks.

Kazakhstan does not currently operate any commercial nuclear plants, although it once had one in Aqtau, built in 1973 on the eastern coast of the Caspian Sea. The nuclear reactors there were dismantled in 1999.

Today, Kazakhstan operates 220 power stations producing 20.4 GW, of which 2.8 GW comes from renewable energy sources (RES). Last year, President Tokayev announced plans to double the country’s GDP by 2029, which will require doubling its energy capacity. It is estimated that by 2029, Kazakhstan will need an additional 14 GW (including 6.2 GW of RES) and 24 GW by 2035.

While the need to expand energy production is clear, experts have differing opinions on what types of power plants should be built. Kazakhstan is rich in gas, coal, and uranium, and the government has also committed to the Paris Agreement on climate change, aiming for carbon neutrality by 2060.

Despite this, many experts believe the outcome of the upcoming referendum is largely predetermined, as the Kazakh government has already made statements emphasizing the need for nuclear power. The government recently conducted a series of public hearings and polls, which indicated that 53% of the population supports the idea. Officials also argue that Kazakhstan needs more diverse expertise to leverage its position as the world’s largest uranium producer (21.3 million tons per year, compared to Canada’s 7.3 million tons).

However, the idea of pursuing nuclear energy is highly sensitive in Kazakh society due to the legacy of hosting the USSR’s nuclear tests—489 nuclear explosions were conducted by the Soviet military in Semipalatinsk, Central Kazakhstan, from 1949 until 1989, leaving thousands of victims.

Kazakhstan’s nuclear path has also been clouded by more recent events involving Mr. Muhtar Jakishev, a prominent figure in Kazakhstan. Mr. Jakishev headed the national atomic energy company Kazatomprom from 1998 until 2009, making it the world’s largest uranium producer.

According to Mr. Jakishev, after a few meetings with Russian President Putin in 2008, he refused Putin’s demands to give up stakes in national nuclear companies. He was then abruptly imprisoned in Kazakhstan for 14 years. After his imprisonment, the Russian state nuclear company Rosatom took control of Kazakh stakes in Uranium One Group, a Canadian-based company responsible for international operations.

Russian influence over Kazakhstan’s nuclear assets didn’t end there. In 2022, Rosatom acquired another 49% stake in the Budyonovskoe deposit—the largest uranium field in Kazakhstan, previously owned by Kazakhstan. The deal was kept low-key and became public through UK media, sparking a significant debate on how it was allowed to happen.

Since 2019, Russian President Putin has also proposed building a nuclear power station in Kazakhstan through Rosatom. However, the war in Ukraine and international sanctions have made this deal politically toxic. In September 2023, President Tokayev announced that the issue of building a nuclear plant would be put to a national referendum, providing him with some maneuvering space to possibly back away from Russian influence by offering contracts to upgrade three coal plants in northern Kazakhstan instead.

Meanwhile, according to the Ministry of Energy, proposals to build a nuclear power station have been received from several countries. Among the most likely contractors are Russia, South Korea, and France. The Ministry of Energy of Kazakhstan has announced its intention to create an international consortium for the project. When choosing a supplier or contractor, several factors will be considered, including technical and economic indicators, the availability of technologies with the possibility of localization in Kazakhstan (primarily the production of fuel for the selected station), personnel training, guarantees of service during the station’s design life, reliability of the supply chain, and other considerations.

However, creating an international consortium with Rosatom would inevitably raise the risk of falling under the RusAtom Sanctions Enforcement Act, currently under review by the U.S. Congress. President Biden has already banned imports of Russian uranium, Finland canceled its contract with Rosatom to build the Hanhikivi 1 nuclear power plant two years ago, and Turkey’s Akkuyu power plant, which is nearly complete and set to be operated by Rosatom, is already facing delays.

Lobbying to build a new nuclear plant was also on the agenda during French President Macron’s visit to Astana in 2023—the first visit by a French president to Central Asia since François Mitterrand in 1994. With uranium supplies from Africa to France being disrupted, France is seeking new sources in Central Asia. France’s Orano Mining and Kazakhstan’s Kazatomprom announced they will commence mining at Kazakhstan’s South Tortkuduk site, which ensures joint uranium extraction for next 15 years.

On June 14 South Korean President Yoon Suk-yeol also visited Astana as part of his Central Asian tour with energy cooperation being a part of talks along with other deals in the sphere of manufacturing, electronics and others.

This does not rule out Russia, which might push for contracting Rosatom if the referendum results are favorable. Refusing Russia carries its own risks, as Kazakhstan shares the world’s longest land border with Russia—over 7,500 kilometers. Russia has been Kazakhstan’s largest trading partner (until China took the lead in 2023), and over 2 million Russians still live in Kazakhstan.

Another concerning issue is the proposed site for the new nuclear power station—Lake Balkhash—located near the Russian military base in Priozersk, which is used for testing new missiles. Given the current situation around the Ukrainian nuclear power plant in Zaporizhzhia, which is under Russian control, this choice of location seems very bizarre as well.

[Representational image. Credit: Markus Distelrath from Pixabay]

The views and opinions expressed in this article are those of the author.