Japan, Kazakhstan to push nuclear co-operation

By Raushan Nurshayeva

ASTANA, May 5 (Reuters) - Energy-hungry Japan and resource-rich Kazakhstan vowed on Monday to develop cooperation in uranium production and nuclear energy, cementing previous agreements in the strategic sector.

Kazakhstan is home to a fifth of global uranium reserves and wants to surpass Australia and China to become the world's top producer by 2010 by cooperating with foreign majors in developing new fields and raising value-added production.

"We have signed a memorandum saying Japan and Kazakhstan will further strengthen cooperation in the peaceful use of nuclear energy," Kanae Yamamoto, Japan's Parliamentary Secretary for Economy, Trade and Industry, told reporters on a visit to the Kazakh capital Astana.

Last year, Kazakh state nuclear firm Kazatomprom signed a deal with Japanese utility Kansai Electric Power Co (9503.T), trading house Sumitomo Corp (8053.T) and Tokyo-based Nuclear Fuel Industries Ltd. to supply Kansai's power plants.

Under last year's deal, Kazatomprom will start sending supplies of nuclear fuel to Japan in 2009 with volume initially at 20 tonnes and increasing later. The company plans to take over 30 to 40 percent of Japan's market in future.

Japanese firms, in turn, will help upgrade Kazatomprom's Ulba plant producing uranium pellets and other value-added products, and invest in developing new deposits.

Yamamoto said production at Western Mynkuduk, the first uranium deposit developed with Japanese company investment, would start in June. The second joint project, Khorasan deposit, will start later.

"Annual output will be 5,000 tonnes (of uranium ore) at Khorasan and 1,000 tonnes at Western Mynkuduk," she said.

Yamamoto did not say how much the Japanese companies had invested in Kazakh projects. The firms have not disclosed the financial details of last year's deal. (Writing by Olzhas Auyezov, Editing by Peter Blackburn)