Zhanakurgan
Kyzyl-Orda Province
Kazakhstan

July 19, 2012 - A unique enterprise of the KazAtomProm National Company has been launched in the Zhanakorgan district in the Kyzylorda region.  It produces sulfuric acid. The plant, the construction of which took three years, began turning out products last week. A special feature of the complex is that it does not produce emissions to the environment.  Our capacity is not more than 40%. We will bring it to the design capacity until the end of this month. We produce 1,500 tons of acid daily. Products are dispatched to our customers.  The production is based on double conversion technologies. A computerized system controls all the technological processes.  Francesco Sama, a starting-up and adjustment specialist from Italy, noted that the plant is environmentally friendly judging by its exhaust pipe, so there are practically no emissions and on the outside it seems that the plant is not working.  Currently the plant employs 284 people. Berik Askarov is one of them. Now that the plant appeared in his native village, he was among other local residents who learned a trade under the “2020 Employment” program and is now working for the new plant.

Uraniumone – Management’s Discussion and Analysis – Year ending December 31, 2010

The Corporation’s SKZ-U joint venture with Kazatomprom and its other joint venture partners continue to advance the development of a sulphuric acid plant near Kharasan at Zhanakorgan. The Corporation’s ownership percentage in SKZ-U is 19%. The total construction cost of the plant is expected to be approximately $217 million, of which approximately 45% has been funded by the joint venture partners to date, with the balance funded by the partners through debt financing. Mechanical completion of the plant is scheduled by the end of 2011 and production of sulphuric acid is expected to commence in 2012. The Corporation has funded $18 million of its debt obligation to date towards the construction of the sulphuric acid plant. The balance of approximately $13 million will be funded in 2011.  Desmet Ballestra and Soyuzcomplect have completed the designs for the engineering work for the plant. Equipment orders have been placed and materials and equipment are arriving on site. The turbine has been manufactured and is ready to be shipped from Europe. In 2010, the general contractor continued work on the foundation for the cooling towers, storage and the laboratory building. The foundations for the converter, acid storage, water and diesel storage are complete. The power generation complex contractor has completed the foundation for the power generation turbine.  Construction of infrastructure facilities such as the access road, enclosed warehouse storage, rail spur, temporary camps, power and water supply are complete. The construction of a water pond is also complete with the piping to be installed during the plant construction stage.  Capital expenditure incurred during 2010 was $50 million, compared to the budget of $60 million. The difference was due to delays in the finalization of the construction contract, delaying the start of construction for the project. Capital expenditure incurred by SKZ-U in 2011 is expected to be approximately $111 million on a 100% basis.

SAP-U / SKZ-U

SAP-U LLP is realizing a program for construction of a sulfuric acid plant in the Zhanakorgan region of the Kyzylorda Oblast with a capacity of 500,000 tonnes per year or 1,500 tonnes per day.  The start of operation is scheduled for the 4th quarter 2011.  On August 31, 2009, a ceremony of laying a capsule into foundation of the new sulfuric acid plant took place. The same day infrastructure facilities of the future plant were put into operation as following:

- an access road (IV category), 9 km long;
- a branch railway, 1.8 km long;
- a single circuit line, 35 kV, 8.8 km, and temporary transformer substation  35/04 kV;
- mobile camps for employees of SKZ-U LLP and Desmet Ballestra;
- a water supply well;
- satellite control room and internet;

Founding members of SKZ-U LLP are Mining Company LLP (NAC Kazatomprom’s subsidiary, 49%), SAP-Japan Corporation (Japan - 32%) and Uranium One (Canada – 19%). Primary consumers of SKZ-U LLP will be Khorassan-1 and Khorassan-2 with total production of 5,000 t U per year.  The shipment of finished product (93% H2SO4) to be made through the pipeline to the terminal station of Zhanakorgan-transit LLP.  All technological processes at the plant will be regulated by a computer controlled system.

Production technology

Sulfuric acid production is based on double conversion/double absorption technology under MECS license.  The raw material for acid production is sulfur, in lumps, obtained from Tengizshevroil LLP and thus, the project will contribute to the improvement of the Caspian region environment by sulfur utilization.

Unit capacity:
- Concentrated sulfuric acid – 1,500 tonnes per day, 500,000 tonnes per year;
- High pressure steam 80,000 kilograms per hour;
- Pressure 43 bars, temperature 400º ?.  

One SAP ancillary product will be electric power generated to the amount of 19.9 megawatt.  In its turn this electric power will be used for the needs of the production facility and supplied to the general regional electric power grid.  Local units for domestic and industrial sewage treatment, the storm sewer system and boiler feed water circulation are designed on the territory of the plant.  Thus, from the output, the plant specialists will have briquette waste and purified water suitable for irrigation.  The main SAP-U LLP principle is not to do harm to the environment.  The LLP is certified for conformity with International Quality Assurance Standards, environmental protection and labour safety: ISO 9001:2004, ISO 14000:2004 and OHSAS 18000.  It is expected that more than 200 working places will be created at the Plant, 90% of which will be for local citizens.  Temporary employment for the period of construction (3 years) will be provided for close to 500 people.  The SAP staff technical training program is planned to be started in 2010.  Madikhan Bekzhanov is Director General of SAP-U LLP.