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MESSAGE FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS
GRI 102-14
KAZATOMPROM IS THE LEADING GLOBAL URANIUM PRODUCER AND THE WORLD’S LARGEST SUPPLIER OF NATURAL URANIUM. OUR PERFORMANCE AND ACHIEVEMENTS HELP US MAINTAIN CONFIDENCE AS WE LOOK AHEAD TO THE FUTURE, WHILE CONTINUING TO ACCEPT RESPONSIBILITY FOR ENSURING WE DELIVER THE RESULTS THAT ARE EXPECTED BY OUR STAKEHOLDERS, INCLUDING SHAREHOLDERS, THE STATE, AND SOCIETY.

DEAR SHAREHOLDERS!

2020 was characterized by the common turmoil experienced across the entire world. The COVID-19 pandemic profoundly changed the way businesses and entire industries operate, and last year was a challenge for Kazatomprom as well. Striving to preserve the life and health of our employees, we took unprecedented measures to minimise the spread of coronavirus and as a result, we saw a cut to our mining output. Despite this, the Company was not only able to maintain stable production and financial performance, but to implement a number of notable investment projects.

With a vision to ensure safe and environmentally sustainable low-cost uranium production at our mines, we continued investing in prospecting, exploration, and development in 2020. Our objective was to increase the economic efficiency of production. In doing so, Kazatomprom worked to secure short- and long-term financial stability as a strategic priority by balancing equity and debt with the help of debt management and financial risk management mechanisms.

The Company’s development and improvement of its financial performance are impossible without effective corporate governance. Continuous improvements lie at the heart of Kazatomprom’s management system, enhancing the Company’s efficiency, transparency and accountability.

Our key processes are regulated by approved regulatory documents and brought in line with the world’s best practices. Throughout 2020, the Company made plans to renew the composition of the Management Board, with the renewal taking place in early 2021. New members of the management team were appointed from professional employees whose expertise and competencies will be a valuable asset, driving Kazatomprom’s further development and improving stakeholder engagement.

In 2020, Kazatomprom succeeded in implementing a range of important investment projects. The most significant initiatives were related to the completion of the fuel assembly plant at the site of the Ulba Metallurgical Plant, as part of the plans for deeper nuclear energy cooperation between Kazatomprom and China General Nuclear Power Corporation (CGN). We plan to start production of the first fuel assemblies in late 2021, followed by the delivery of the first certified lots of fuel assemblies to the customer.

Strengthening the Company’s position in the South American market was no less important. In February 2020, Kazatomprom won Dioxitek’s tender to supply uranium concentrates for the Argentinian nuclear power industry, thus meeting the objective of further diversifying our contract portfolio and boosting sales.

Despite the past year’s volatility in the capital markets, during the first half of the year Kazatomprom’s majority shareholder, Samruk-Kazyna JSC, successfully completed an additional placement of the Company’s equity. This translated into a rise in Kazatomprom’s free float to the full 25% originally envisioned at the time of the IPO, and marked another move to increase trading liquidity. The Company’s increased market capitalisation, from around US$3 billion in 2018 to about US$6.9 billion at present, also indicates the advantage obtained as a result of additional placement in the form of higher liquidity.

Compliance with the principles of the UN Global Compact and the Sustainable Development Goals (SDGs) also increased over the past year, and to reinforce the importance of this area, Kazatomprom approved its Corporate Sustainable Development Policy in 2020. The Policy outlines priority areas and approaches to hardwiring sustainable development principles into key aspects of the Company’s operations. Among them are human capital development, health and safety, environmental responsibility, and research & development. Kazatomprom continues investing consistently in employees and their safety, environmental protection, and regional development. Our objective is to retain and increase our core asset – our people – and create comfortable and safe working and living conditions for the current and future generations.

In 2020, despite all the challenges and shocks the world faced amid the coronavirus pandemic, Kazatomprom continued to adhere to its Strategy and responsibly met its obligations to all stakeholders. This included maintaining the dividend payment according to the dividend policy, which we are happy to say was up by 24% year-over-year.

I am confident that with our expertise, professionalism of management, and team unity, we can rise to any challenge and further strengthen our position as the industry leader.

Chairman of the Board of Directors
NAC Kazatomprom JSC
Neil Longfellow