Dmitry Baranov, a leading expert of Finam Management MC:

 — It is necessary to increase raw material stocks in order to ensure Rosatom’s foreign orders

Rosatom is going to use the controlling stock interest in Uranium One, a Canadian company, as a starting point for the plan of global diversification. This was announced by Sergey Kiriyenko, the head of Russian state corporation, in the interview granted to Financial Times. General Director of Rosatom noted that acquisition of Uranium One was not an ultimate goal of their uranium strategy development. Kiriyenko explained that they wanted to provide the growth platform as a base for further development of their progress in integration, cooperation and deals of amalgamations and mergers at other markets. The head of Rosatom gave an interview being on an official visit in Canada in order to support the deal of increasing the share of Atomredmetzoloto (ARMZ), a uranium holding, in Uranium One from 17% up to 51%.

Dmitry Baranov, a leading expert of Finam Management MC:

«Globalization and establishment of different alliances in the global economy is really the key trend of the last decade. A real benefit of globalization is in the fact that a company acquires a greater economic stability by means of a broadwise development in terms of geographic and / or industry factor. It increases the possibility of attracting investments from various sources and helps to gain experience at different markets. And, of course, the company becomes better known and attracts new clients who increase its profit.

In addition such global alliances can significantly save money by acquisition of the necessary resources in other countries / industries. It is not surprising that the number of such alliances is growing worldwide. There are a lot of examples of such alliances: Renault-Nissan, PSA Peugeot Citroen and Mitsubishi Motors Corporation; airline alliances: Star Alliance, Oneworld, SkyTeam and Praxity International Auditing Association. And this is only a small part of global alliances and unions which exist today in the global economy.

That is why it is not a surprise that Rosatom, as an organization which tries to comply with modern management standards and introduces advanced management methods in its structure, has concluded an agreement on acquiring of a Canadian company called Unranium One. Within the framework of this union Rosatom will get an opportunity to diversify the uranium supplies for its current and future projects, lower its raw acquisition expenses and develop a strict and transparent fuel supply system for its projects. In addition, Rosatom will gain experience at new foreign markets and will be able to know about new management technologies used at Uranium One and, perhaps, put them into practice. It is also important that by means of this deal Rosatom guarantees fuel supplies for all NPPs, which the Russian company is constructing or is going to construct abroad. In other words, now it has got foreign partners for each stage of NPP construction and operation – from raw materials extraction to plant decommissioning.

With the help of this deal the Canadian company will get a guaranteed sale of its products, investments for the development and new assets acquisition, the most advanced and safest technologies for nuclear materials handling.

It is not a coincidence that Rosatom has chosen Uranium One. For years the company has been demonstrating excellent production and financial results. It has diversified assets in different parts of the world (Kazakhstan, Australia, the USA). It has one of the industry’s best reserves figures in terms of mining cost which comprise less than 40 dollars. Moreover, Uranium One has a high potential for capitalization growth, it maintains high standards of corporate management and is guided by one of the best and most professional management teams in the whole nuclear power industry. In other words, it was not a mistake for Rosatom to choose Uranium One as a strategic partner of the global alliance, as it is satisfied with all criteria usually required from such companies.

It is necessary to increase raw material stocks in order to ensure Rosatom’s foreign orders. Rosatom has developed and is realizing a strategy for diversification of the mineral resources base, both in terms of geography and uranium production cost so that to solve this problem and implement the objectives for the development of mining in the category below 80 dollars. Kazakhstan, Africa and Australia have become the priority directions for the development. The key task is to ensure economic efficiency of production by means of cheap assets. The stocks of our land are a strategic reserve and guarantee of Rosatom’s stability for a long term. Therefore, the acquisition of Uranium One will help to use its raw material stocks for flawless compliance with all foreign contracts concluded with Rosatom.

One shall also take in consideration that the number of reliable suppliers and low cost minefields in the world is restricted, and consumption of uranium with cost below 80 dollars per kilogram will only increase, which by 2020 can result in its deficit.”