The key uranium holding of Rosatom Uranium One (U1) will turn into exclusively a mining company. U1 will transfer its functions for trading natural uranium abroad to Techsnabexport, which previously only dealt with the sale of enriched uranium. Recently, against the backdrop of low uranium prices, both companies have reduced profitability, a new trading scheme can create a common profit center in uranium exports.

Rosatom has decided to combine Tenex, which sells enriched uranium for nuclear power plants and uranium enrichment services, on the basis of its trading house, and foreign trade in natural uranium, which Uranium One has been working on for the time being. This was told to "b" sources familiar with the situation, and confirmed in U1 and Teneh. The companies referred to the project of the state corporation "Horizon" (consolidation of the enterprises of the branch, "Kommersant" talked about the program on May 2, 2017), saying that one of its tasks is "to increase the efficiency of operations in foreign markets," including the supply of goods and services of the nuclear fuel cycle - "from natural and enriched uranium to the treatment of spent nuclear fuel."

The decision to transfer the Tenex trading functions of U1 to natural uranium was taken at the end of 2017, now there is a "process of coordinating the schedule and the conditions for their phased transfer," say in "Techsnabexport" and U1. We note that last summer U1, on the contrary, was going to actively develop its own trading: then in Switzerland, Uranium One Trading AG was created. U1 then wanted to increase its share in the world uranium market through spot and medium-term contracts, as well as to develop the trading of metals and minerals.

Now U1 consists mainly of assets in Kazakhstan with a low cost of uranium mining (70% in the projects of Akdal and South Inkai, 50% in Karatau and Akbastau, 49.98% in Zarechny and South Zarechny, 30% in Kharasan). The holding also owns a project in the US Willow Creek and shares in the Mkuju deposit in Tanzania, is in talks with Namibia about licenses for new assets. The main revenues of the holding come from the sale of natural (unenriched) uranium abroad, Rosatom holding Atomredmetzoloto (ARMZ), which owns local assets with a higher production cost, operates on the Russian market. Revenues U1 Inc. under IFRS for 2016 was $ 314.6 million, for the first nine months of 2017 - $ 196.1 million, profit - $ 252.6 million and $ 27.1 million, respectively. According to the ARMZ report, for the year 2016 the company with a revenue of 22.2 billion rubles. received a consolidated net profit under RAS 4.6 billion rubles. (before that, the holding showed losses).

Techsnabexport is a trading company traditionally considered one of the most profitable structures of Rosatom, but never engaged in actual production (mining, conversion or enrichment of uranium). Tenex's revenue under IFRS in 2016 fell by 26% to $ 2.15 billion, net profit almost 2.5 times, to $ 394.6 million. The export profitability is adversely affected by low prices as natural uranium (according to UxC, on January 1 spot quotes were $ 23.75 per ounce, in 2016 fell below $ 20), and for enrichment services. The period of low prices lasts from 2011 - since the accident at the Japanese nuclear power plant "Fukushima-1", and while the market remains stable supply surplus (about attempts of uranium mining companies, including Kazatomprom, to support prices, eliminating imbalance, see " Kommersant "from November 18, 2017).

Sources of Kommersant did not rule out the possibility of transferring assets of U1 or the holding itself to Teneh. But such "K" schemes in companies have not been confirmed: "U1 retains the status of an independent legal entity managing its foreign mining assets, all current obligations to foreign partners will be met." "Horizon" implies, in particular, avoiding schemes for winding margins when reselling goods within the perimeter of a state corporation, which reduces the profitability of the sale of end products to external consumers. In fact, in this case, Rosatom forms one "profit center" for the final product, in which the main revenue is concentrated. One of the interlocutors of Kommersant, who are familiar with the situation, says that the profit center for the extraction and sale of natural uranium will move from U1 to Tenex.