Jan. 10 (Bloomberg) -- Kazakhstan, the world's third-biggest uranium producer, plans to increase output fivefold within a decade and overtake Canada as the largest supplier of nuclear fuel.

The Central Asian nation intends to mine 30,000 metric tons a year by 2018, Mukhtar Dzhakishev, president of state-run producer Kazatomprom, said in an e-mailed response to questions on Jan. 8. Kazakhstan extracted 5,279 tons in 2006, about 4,600 tons less than Canada, according to the World Nuclear Association in London.

``It's important for Kazakhstan to get the maximum stake in the nuclear fuel market,'' Dzhakishev, 44, said from Almaty. ``The price of uranium will definitely continue to rise because of the excessive demand. The shortage of uranium will reach a critical level in 2014.''

Record oil and coal prices, combined with the threat of global warming, spurred demand for nuclear power and uranium to fuel reactors. Uranium rose to a record $138 a pound in June, compared with $6.75 as recently as 2001, as rising consumption forced manufacturers to recycle nuclear warheads to meet demand.

Power companies are building 30 nuclear generators, planning another 74 and have proposals for a further 182, in addition to the existing 437 plants, Lehman Brothers Holdings Inc. said in a report in June.

Disruption at mines run by Saskatoon, Saskatchewan-based Cameco Corp. caused last year's rally to accelerate. Cameco, the world's biggest uranium mining company, Paris-based Areva SA and Japan's Kansai Electric Power Co. are among foreign firms operating in Kazakhstan.

Kazatomprom has yet to determine its expansion cost, Dzhakishev said.

Acid Shortage

The company plans to save money by mixing hydrogen peroxide with sulfuric acid to extract metal from ore. Kazatomprom now uses only acid, which can represent as much as a fifth of mining costs, according to the World Nuclear Association, which represents power generators.

Uranium One Inc., the Toronto-based developer of a Kazakh uranium mine, cut its production target for 2008 by 38 percent in October because of a shortage of sulfuric acid. Uranium mining in the country requires as much as 80 kilograms of acid to extract 1 kilogram (2.2 pounds) of metal, according to the WNA.

The shortage began with a fire last year at a Kazakh plant, and the start of a new facility has been delayed. Dzhakishev said he plans to import acid from Russia and expects the return of normal supplies by March.

Kazatomprom has tested hydrogen peroxide at one mine and plans to use it more widely this month, Dzhakishev said.

Kazatomprom wants to expand in the nuclear industry, including enrichment, he said. The company will seek money internationally to pay for building an enrichment plant in Russia by 2012, Dzhakishev said, without giving further details.

To contact the reporters on this story: Nariman Gizitdinov in Almaty, through the Moscow newsroom at ngizitdinov@bloomberg.net. Benjamin Rahr in London at brahr@bloomberg.net.

Last Updated: January 10, 2008 01:40 EST