Russian state nuclear corporation Rosatom is selling its stakes in several joint-venture uranium projects with the world’s largest uranium producer, Kazakhstan’s Kazatomprom, to Chinese-controlled companies, Kazatomprom said in a press release on December 17.

The move comes amid increasing challenges posed to Rosatom's international dealings due to Western sanctions on Russia introduced in response to the Ukraine conflict. Kazatomprom has continued to face challenges due to its association with Rosatom, including difficulties in selling uranium to Western buyers. Around 29% of the company's output is sold to Europe, but sanctions on Russian entities and executives have raised risks for Kazatomprom’s operations and reputation, even though Rosatom itself has not been directly sanctioned.

As reported by Reuters, Kazatomprom outlined risks in its latest annual report, noting some of Rosatom’s group companies as well as senior Russian nuclear power industry executives were under sanctions.

"There are also risks associated with Russian partners in the Group’s subsidiaries, associates and joint ventures, including reputational and corporate governance risks," it said.

Kazatomprom announced that Rosatom’s subsidiary, Uranium One Group, has sold its 49.979% stake in Kazakhstan’s Zarechnoye mine to SNURDC Astana Mining Company, owned by China's State Nuclear Uranium Resources Development Company. Additionally, Uranium One is set to transfer its 30% stake in the Khorasan-U joint venture to China Uranium Development Company, a subsidiary of China General Nuclear Power Corporation (CGN).

The Zarechnoye deposit, with reserves of 3,500 tonnes as of early 2024, and the Khorasan-U venture, operating in Kyzylorda region with reserves of 33,000 tonnes, remain significant contributors to Kazatomprom's production portfolio. Uranium One's Kazakh operations produced 4,831 tonnes of uranium in 2023.

While Kazatomprom retains its existing stakes in these projects, the sale further solidifies China's position as the largest buyer of Kazakh uranium. China’s increased involvement aligns with its broader efforts to secure critical resources for its expanding nuclear energy sector.

Rosatom previously held stakes in six of Kazatomprom’s 14 uranium deposits. It will maintain stakes in Kazatomprom deposits with combined reserves of 255,000 tonnes, including the massive Budennovskoye deposit, one of the world's largest uranium reserves.

Is Russia getting pushed out?

Ukrainian political analyst and former advisor to Ukraine's internal affairs minister, Anton Gerashenko, shared his view in a post on X that Rosatom’s stake sales signify Russia’s loss of influence in Kazakhstan and Central Asia more widely.

“China is pushing Russia out of Kazakhstan's uranium sector — Russia is gradually losing its influence in Central Asia,” Gerashenko asserted, noting that “with Russia diminished, Kazakhstan is choosing China—and the shift looks irreversible.”

Gerashenko cited the weakening of Russia’s economy and a loss of credibility of Moscow as a regional security leader—after the war in Ukraine exposed its military vulnerabilities—as two of the primary reasons for Kazakhstan “choosing” Chinese influence.

Gerashenko’s view, however, clashes with observers' expectations that Kazakhstan is set to pick Rosatom to lead the construction of the country's first nuclear power plant (NPP). That could be the case even if Rosatom is asked to work within the confines of an international consortium of companies that Kazakhstan intends to form.

The expected companies in the consortium, aside from Rosatom, are nuclear energy firms from China, South Korea and France, but it is likely that the actual construction works will be carried out by Rosatom.

Given Vladimir Putin’s November visit to Astana for a state visit and a Collective Security Treaty Organization (CSTO) summit, during which Kazakh authorities reiterated that they will not adhere to sanctions against Russia to Kazakhstan’s own detriment, it is perhaps unlikely that Kazakhstan is so starkly choosing between Russia and China.

However, Gerashenko’s comments do rhyme well with the background on Uranium One’s acquisition by Russia in 2010. Leaked videos of interrogations of a former head of Kazatomprom, Mukhtar Dzhakishev, placed on YouTube appeared to make the case that Russia bought a 51% stake in Uranium One in order to gain control over some of Kazakhstan’s key uranium assets.

The acquisition also prevented Dzhakishev pursuing uranium ambitions that would have turned Kazatomprom into a central link between Russia, the US, France, China and Japan. Dzhakishev envisaged China and Japan as key partners in the plan, where the two were expected to acquire a 20% stake in Uranium One in order to prevent Russia from gaining a controlling stake.

There was speculation that the situation was the main reason for Dzhakishev’s imprisonment in 2009. Both leaked US diplomatic wires on WikiLeaks and videos posted on YouTube looked at how Russia may have been behind Dzhakishev’s removal from Kazatomprom and arrest.   

In the light of such speculation, Rosatom’s decision to sell of some of its Uranium One-controlled assets to Chinese-controlled firms does look like a sign of waning influence, or at least rings with great irony.