I am pleased to introduce Kazatomprom’s integrated annual report for 2021, which contains up-to-date information on the economic, social and environmental aspects of the Company’s activities.
Current events in Russia and Ukraine have resulted in increased attention on energy security and diversification of generation sources, pushing nuclear power to the forefront as an indispensable baseload alternative to fossil fuels. Against the backdrop of the global conversation to highlight the climate change challenge and advance the development of low-carbon economies, we have seen politicians, the business community and technical experts showing greater interest in the nuclear industry. As the world's leading producer and supplier of natural uranium, Kazatomprom expects to play a significant role in the energy transition efforts while remaining committed to its long-term value creation strategy. Together with our partners, the Company, meeting high international standards for production and environmental safety, produces over 45% of the world's uranium, using the ISR method.
Despite the ongoing impact of the COVID-19 pandemic throughout 2021, Kazatomprom maintained its leadership position in the international uranium market. That performance efficiency led to a positive impact on the Company’s credit ratings, with the international rating agency Moody's upgrading Kazatomprom's rating from Baa3 to Baa2 in 2021, with a stable outlook.
The ongoing development of the Company and the strengthening of its position in the market were facilitated by Kazatomprom’s corporate governance system. The primary goal of that system is to increase the long-term value of the Company by building an efficient and transparent business, and by remaining a reliable and efficient partner for customers and shareholders. Based on the results of an independent governance study completed by an international consulting firm last year, Kazatomprom demonstrated a high level of corporate governance, resulting in an upgraded rating from BBB to A.
This result is evidence of the increase in the efficacy of Kazatomprom’s internal systems, where protection of shareholders’ rights, the efficiency of the Board of Directors and the executive body, as well as the processes that ensure transparency and information disclosure, have all been improved.
In 2021, we saw a number of changes to the composition of the board of directors and the Company's management board, including the departure of our chief executive officer, Mr. Galymzhan Pirmatov. Mr. Pirmatov was instrumental in the success of Kazatomprom’s IPO in 2018 and with strong board and management support, he played a key role in establishing robust systems to ensure compliance and transparency. The Company is stronger than ever thanks to the commitment of each top manager and board member, and to those who have departed, we sincerely thank you for your contributions. In alignment with the Company’s succession plan and recognizing the need for continuity, Mr. Mazhit Sharipov was appointed to the role of CEO in September, the first time an internal candidate has been promoted to the top position. I am fully confident that Mr. Sharipov’s extensive experience and strategic thinking will prove to be of significant value in leading a management group that includes several new top managers, and I am equally confident that the new team will strengthen Kazatomprom’s ongoing development to the benefit of all interested parties.
The Company continues to focus on sustainable development. As the world's largest uranium mining company and a leader in the nuclear industry, Kazatomprom understands that it plays a key role in both local and global social development. In its operating regions, the Company continues to be proactive in addressing the impacts of its activities on the environment and in improving social conditions of its employees and surrounding communities. Sustainability is a fundamental component of Kazatomprom’s development strategy, and delivering results on our ESG-related goals and objectives is an integral part of our plans. Applying the best international practices in this area, the Company is making significant investments in environmental protection activities, taking all necessary measures to preserve the natural environment around the operations, and using natural resources responsibly to minimize environmental impact.
In 2021, Kazatomprom implemented a number of significant projects. One of the important highlights was the launch of the Company’s new plant for the production of fuel assemblies, Ulba FA LLP. The project is a good example of successful multilateral cooperation between the world's leading companies in the nuclear industry. The implementation of an innovative project like Ulba FA LLP for the production of nuclear fuel assemblies is an example of the Company's contribution towards achieving the carbon neutrality goals of the Paris Agreement.
Another significant highlight was the signing of two significant long-term supply contracts with major Chinese energy companies – China National Uranium Company Limited and State Nuclear Uranium Resources Development Company Limited. These business transactions are a testament to Kazatomprom’s reputation as a preferred, reliable supplier to the global nuclear fuel market.
During the reporting period, the Company continued to demonstrate strong financial and operational performance nothwithstanding the prolonged effect of the global COVID pandemic. In 2021, the payment of dividends to the Company’s shareholders based on 2020 results was 52% higher than the dividend paid in 2020. Despite the uncertainty and volatility in international markets caused by external factors, Kazatomprom continues to adhere to its strategy and is delivering value, with great potential to further enhance shareholder value in new growth areas.
The Board of Directors will continue to provide direction and improve the efficiency of the Company's activities, while representing the best interests of all stakeholders in its decision-making.
On behalf of the Board of Directors, I would like to express my gratitude to all of our stakeholders – especially Kazatomprom’s shareholders, employees, customers and partners – for their mutually beneficial cooperation in 2021, and look forward to their continued contribution in the years to come.