KYIV, Nov 25 – Prime Minister Denys Shmyhal was asked Wednesday to intervene into a dispute between the two state companies over the price of uranium oxide concentrate that threatens to undermine the country’s uranium mining industry.

Energoatom, the national nuclear power generator, and Skhidniy Mining, the largest uranium concentrate producer, have accused each other of breaking supply contract before asking Shmyhal to look into the issue.

Energoatom, which is supposed to pay in advance for uranium concentrate shipments, said Skhidniy has been overcharging the company with prices exceeding the price of uranium oxide concentrate on world markets by 20%.

In response, Skhidniy accused Energoatom of underpaying for the supplies, breaking the contract and undermining the national uranium production program.

Ukraine sits on the world’s 10th largest deposit of uranium ore, from which it makes uranium oxide concentrate, or yellowcake. Energoatom buys yellowcake from Skhidniy and sends it for enrichment to Russia, which manufactures nuclear fuel assemblies for nuclear power plants in Ukraine.

Energoatom, the largest producer of power in Ukraine, denied Skhidniy’s allegations of underpayment.

Recently “Skhidny Mining said that this year it would not be able to close the full volume of supplies and offered to transfer 90 metric tons of uranium oxide concentrate to January 2021,” Energoatom said in a statement.

Energoatom said Skhidniy so far this year delivered 522.9 metric tons of uranium oxide concentrate to Energoatom, about a half of what has been agreed to by the contract for 2020.

Energoatom and Skhidniy signed a deal in November 2019 that calls for the miner to supply 1,000 metric tons/year of uranium concentrate during 2020-2025, while Energoatom has agreed to pay UAH 2,912 per kg of the commodity.

However, world market prices for uranium concentrate have plunged to $80 per kg, or UAH 2,260 per kg, making the contract essentially unprofitable for Energoatom.

Energoatom paid UAH 2.63 billion to Skhidniy so far this year, while only receiving 522.9 metric tons of uranium concentrate.

Skhidny Mining's receivables to Energoatom for the uranium concentrate, which has already been paid in advance, is UAH 811.4 million, Energoatom said.

“This form of cooperation between Energoatom and Skhidny Mining is not optimal, since Energoatom's advance payments for future supplies results in Skhidny Mining's debt to the company,” Energoatom said.

Energoatom acting president Petro Kotyn and Skhidny Mining general director Anton Bendyk asked Shmyhal to hold a special government meeting that would resolve the dispute and to revise the price disparity for uranium concentrate supplies in 2021. (om/ez)