Amid ongoing global warming, energy sources that do not emit carbon dioxide, a major component of greenhouse gases, have been drawing growing attention. While securing supplies of such fossil fuels as oil and natural gas is important, it is crucial for sustainable economic development well into the future to secure access to other energy sources.

Contribution to Nuclear Power Generation
Securing Stable Access to Uranium

Nuclear power has been regaining favorable comments in recent years. It can produce large volumes of electricity efficiently with no carbon dioxide emissions, making it a strong contender in an age of increasing concerns about climate change. To be sure, nuclear power entails its own risks, including the disposal of nuclear waste and possible consequences of nuclear accidents, to which careful considerations should be given. However, the significance of nuclear power was recognized anew at the 2005 Gleneagles Summit in the United Kingdom, which has elevated it again to an important place in the energy policy of many countries.

Nuclear power accounts for a little more than 30% of the total power generated in Japan. The National Nuclear Energy Plan prepared by the Japanese Government in 2006 set out concrete measures toward generating more than 30-40% of total power with nuclear energy beyond 2030, laying down the policy of vigorous harnessing of nuclear power.

Nevertheless, like oil and natural gas, Japan relies on imports for almost all the uranium it consumes as the input in nuclear power generation. Securing a long-term and stable supply of uranium is a crucial challenge to implementing the national energy policy.

The central Asian country of Kazakhstan has the world's second largest proven uranium reserves and accounts for 20% of the total uranium ore output in the world. However, the country supplies only 1% of Japan's uranium ore imports.

In the National Nuclear Energy Plan, the Japanese Government designated Central Asian countries, including Kazakhstan, as a region of strategic importance for securing access to uranium, and called for an increase in its stable supply through the participation of Japanese firms in uranium mine development, in addition to relying on contractually-based imports.

Following this government policy, JBIC continues to support Japanese companies for acquiring interests and participating in uranium mine development in Kazakhstan.

In 2006, JBIC signed a co-financing loan agreement totaling close to US$100 million for the uranium mining project in West Myunkduk, Southern Kazakhstan, which was a joint undertaking of Kazatomprom (the national atomic company), a Japanese trading company and electric power company. The project will start the commercial production of 1,000 tons of uranium concentrate by the year 2010, and uranium ore thus produced will be supplied to Japan. JBIC also signed a memorandum of understanding (MOU) for a comprehensive partnership with Kazatomprom in the same year to strengthen strategic ties with the company.

This was followed by another co-financing loan totaling around US$200 million in 2007 to finance the uranium mine development project in Kharassan, a joint venture of Kazatomprom and a different trading company and electric power companies in Japan. A total of 5,000 metric tons of uranium concentrate will be produced annually in this project, with these participating Japanese companies having the right to acquire up to 2,000 tons. The combined total of uranium products that the Japanese companies can acquire in these two projects will meet about 40% of annual uranium demand in Japan. There are high expectations that they will make a considerable contribution to a stable uranium supply for Japan's nuclear power generation.