Monsters of Rock: Kazakh shut gives hope for uranium stocks

ASX uranium plays are rising amid hopes a Kazakh mine delay will lead to higher prices, plus Jervois and Fortescue.

You can't keep ASX uranium down for long. Pic: Getty Images

• Uranium miners burst out of the gate in 2025 as Kazakh mine halts

• Jervois investors holding the bag after cobalt stock sells up to hedge fund

• FMG lodges EPA docs for new iron ore development

2025 has begun with staggering gains for the ASX's cohort of uranium stocks, which awoke from New Year's Eve hangovers to news from the Kazakh front that one of the world's largest uranium mines would be thrown into temporary suspension.

The Inkai JV, held 60% by the world's biggest producer State-sponsored Kazatomprom and 40% by Canada's Cameco, would be paused because documentation to approve mining for this year has not been submitted.

It's expected to come through in the next couple weeks, with the London-listed miner saying it doesn't expect to see any 'significant impact' on its 2025 production.

Analysts aren't so sure, though.

Canaccord Genuity's Katie Lachapelle, who covers Cameco from the broker's Canadian office, says the firm is sceptical on Kazatomprom's claim production impacts won't be material. Inkai is estimated at around 15% of Kazakhstan's primary uranium supply.

"In our view, the temporary suspension of production at JV Inkai highlights ongoing supply risks in the uranium market, which could positively influence spot price momentum in the new year," she said in a note to clients.

"Investors should monitor the situation closely, particularly the upcoming February update from Kazatomprom, which will provide further clarity on 2025 production guidance and broader market implications."

Canaccord's Alex Bedwany, who covers Kazatomprom, says 2025 production guidance will likely come in well below the 25,000-26,500t target set by the miner last year, predicting it will be closer to 23,000t "due to ongoing constraints around acid availability and development delays".

Kazakhstan delivers around 40% of the world's yellowcake.

This is all music to the ears of the ASX's uranium class, which largely suffered big hits in 2024 as spot prices fell over 20%.

Paladin Energy (ASX:PDN) rose 9.4% in morning trade, with South Australian producer Boss Energy (ASX:BOE) climbing 9.7%. Deep Yellow (ASX:DYL) gained over 10%, with top Canadian developer NexGen Energy (ASX:NXG) 9% higher.

Smaller Aussie stocks were even more sensitive to the news. Lotus Resources (ASX:LOT) gained 12.5%, with Bannerman Energy (ASX:BMN) 12.4% higher and Elevate Uranium (ASX:EL8) lifting 13.2%. Aura Energy (ASX:AEE) and Peninsula Energy (ASX:PEN) rose 1.5% and 5.2% respectively.

Cobalt stock hits the nuclear option

Retail investors will walk home with nothing as Aussie cobalt producer Jervois Mining (ASX:JRV) announced a deal that will see an American hedge fund take the miner and refiner private.

That list includes AustralianSuper, Australia's largest investor and controller of retirement savings, which holds close to a quarter of the stock.

It all reflects poorly on AusSuper's decision to pour millions into an entitlement offer in mid-2023, when experts were warning on the frail state of the cobalt market.

Despite waning demand from a shift in EV battery chemistries in China, production surged last year even after prices hit a 'real' 40 year low in 2023.

Fastmarkets estimates the market was oversupplied to the tune of 25,000t in 2024 and will be again by 21,000t this year.

The world's biggest supplier is China Molybdenum Co or CMOC, which upped production by 127% to 84,722t in the first nine months of 2024. The issue is its cobalt output is tied to the production of copper in the DRC, meaning it can up cobalt output without losing money.

Indonesian cobalt output also rose significantly as a by-product of its rapidly expanding nickel industry.

Millstreet Capital Management will put US$145 million of new capital in to fund the JRV business, including plans to restart a shuttered refinery in Brazil, and will also convert US$100 million of bonds linked to the also mothballed Idaho mine in the USA to equity.

A total of US$170m in debt will be wiped with US$25m in convertible notes and an expected US$44.5m repayment on a working capital facility for its Finnish refinery to be made on the close of the transaction.

Once it's all wrapped up, Jervois will apply to be delisted by the ASX and seek waiver from the ASX to do it without shareholder approval. JRV's Kokkola refinery in Finland, acquired from copper giant Freeport in 2021, was on track to produce 5100-5400t of cobalt in 2024.

Its shares were worth over $1 billion in 2022, but fell from over 90c in April 2022 to just 1.1c, decreasing in value by close to 99%.

FMG preps next generation

Andrew Forrest's Fortescue (ASX:FMG) has told environmental regulators it plans to set its next generation of iron ore mines up to hit its "real zero" target from the go, after opening a public comment period on a new iron ore mine 55km north-west of Newman.

It anticipates Mindy South, which will have a processed ore capacity of 40Mtpa and sits adjacent to Rio Tinto's (ASX:RIO) key Rhodes Ridge project, will be developed just before 2030, the deadline for its ambitious plan to remove scope 1 and 2 CO2 emissions from its Pilbara iron ore ops.

That would come in after the Nyidinghu project 30km to the north, which is expected to begin construction in 2026.

According to referral documents filed with WA's Environmental Protection Agency, the project's two-year construction phase will be 'diesel-powered', with scope 1 emissions falling from 286,556tpa CO2-e during the construction phase to under 100,000t (combined with scope 2) from FY2031 on once it is in operation.

Scope 3 emissions related to steelmaking customers are expected to dwarf those at ~48.76Mt CO2e.

The mine is expected to run for 13 years following the two-year build, with a five-year decommissioning phase to follow.

FMG says the mine will be powered through large-scale renewables from its separate Pilbara Transmission Project, with the proposal to also include provision for the construction of an onsite solar farm.

The public comment period is open until January 8. FMG plans to ship 190-200Mt of iron ore from the Pilbara this year at C1 costs of between US$18.50-19.75/wmt, including 5-9Mt from the Iron Bridge magnetite mine.

The ASX 300 Metals and Mining index rose 1.02% over the past week.

Which ASX 300 Resources stocks have impressed and depressed?

Making gains 

Wildcat Resources (ASX:WC8) (lithium) +19.2%

Syrah Resources (ASX:SYR) (graphite) +18.1%

Spartan Resources (ASX:SPR) (gold) +13.7%

ioneer (ASX:INR)  (lithium) +9.7%

Eating losses 

Vulcan Steel (ASX:VSL) (steel) -10.2%

MAC Copper (ASX:MAC) (copper) -3.1%

Sandfire Resources (ASX:SFR) (copper) -2.8%

Bluescope Steel (ASX:BSL) (steel) -2.2%

Small battery metals stocks led the way in a solid week for the ASX metals and mining sector, punctuated by hopes more stimulus was on its way this year for China's stuttering economy.

The country's latest PMIs came in below analyst expectations, but at least showed economic activity was, mildly, rising last month.

But a ho-hum start to 2025 for copper pricing had MAC and SFR on the loser's list in a generally positive week for miners.

At Stockhead we tell it like it is. While Spartan Resources, Aura Energy and Elevate Uranium are Stockhead advertisers, they did not sponsor this article.

Originally published as Monsters of Rock: Kazakh shut gives hope for uranium stocks