It is widely accepted that Kazakhstan is on the fast-track to overtaking Australia and Canada to become the global leader in uranium production either this year or next. It is estimated that as much as 50 per cent of uranium industry growth over the next few years could likely come from Kazakhstan.

Home to nearly 20 per cent of the world’s uranium reserves, Kazakhstan produced 6,637 tonnes of uranium in 2007 and 8,521 in 2008. The Central Asian nation plans to produce around 11, 900 tonnes this year.

So, despite its obvious potential for political risk, it’s likely Kazakhstan will continue to attract key players in the uranium industry.

The problem, however, is that the KNB (formerly KGB) has arrested the former head of Kazakhstan's state uranium firm (Kazatomprom), Mukhtar Dzhakishev, and accused him of using offshore firms to steal billions of dollars worth of uranium assets. Some question how Dzhakishev could have stolen “more than 60 per cent of state uranium deposits worth tens of billions of dollars,” as the KNB claims, out from under such a heavily monitored and audited industry as exists in Kazakhstan.

The Associated Press notes, “Mukhtar Dzhakishev was the latest businessman detained in what some have called a crackdown on executives with ties to opponents of President Nursultan Nazarbayev. The arrest follows a string of widely publicized corruption cases and arrests in Kazakhstan, which is firmly controlled by Nazarbayev, his family and his allies,” the report continued.

Some analysts in the mining industry, like senior editor of Case Energy Opportunities Marin Katusa, believe the political risk in post-Soviet era countries like Kazakhstan is bound to negatively affect the uranium mining sector at least in the short term....but as you can see from the quote above, it won't affect prices in the long term.

My favorite line from this story: Nevertheless, with the uranium supply/demand fundamentals leaning more to the demand side the uranium-rich nation of Kazakhstan is key to maintaining the global aboveground uranium supply.

That line is filled with so much perfect irony for an anti-uranium mining advocate that I can't touch it.