URANIUM PRICING | SPECIAL REPORT Thomas’ comments chime with general feel of current
market sentiment, especially given a number of analysts believe that, under certain circumstances, the price has the potential to increase to up to $300 per pound. That extreme forecast has in part been triggered by recent announcements that many countries intend to accelerate the development of their nuclear power sector through the active building of new power plants while others are looking to enter the nuclear generation club for the first time. The United States is among many nations to have announced plans that it intends to triple the country’s nuclear capacity by 2050 at the COP 28 conference last year while beyond that commitment plans for substantial new build nuclear are also in play in China, Japan, France and many others. At the same time the existing supply restrictions on the market due to the geopolitical situation is widely expected to contribute to further growth of prices. For instance, the on-going conflict in Ukraine potentially could impact Europe’s supply of uranium, given that much of the exports to the EU from Kazakhstan go through the Black Sea.
The impact on nuclear development Despite the many factors that are aligning to push uranium prices higher analysts believe that even further price rises will do little to curb market demand for uranium. As Timofeev says: “Even if the price of uranium rises to $1,000 per pound, the cost per kilowatt-hour compared to generating it on coal or gas will be minimal. Innovations and small modular reactors are rapidly appearing in the industry. In 2023, the construction of 58 reactors and at least more has been completed in different countries, while an additional 10 will be completed in 2024.”
In the wake of these broad trends analysts expect that
sustained high uranium prices will lead to the resumption of once-stalled uranium production projects. Certainly, the global majors in uranium production plan further capacity expansions this year. Nic Brunetti, official spokesman of enrichment company
Urenco told NEI that capacity expansions were already approved at its sites in Germany, Netherlands and the USA, “which altogether will provide 1.6 million extra SWU capacity when they are complete”. Brunetti adds: “In 2024 these projects will continue in earnest at the sites and we will also continue our refurbishment projects where older centrifuge equipment is updated and replaced. Any further announcements for expansion will be taken with a strong regard for the needs of the market”. Orano too is looking boosting its enrichment capacity.
According to Thomas, the company has an industrial project aimed at increasing its enrichment capacity by 30%. Rising prices may also encourage countries to take the decision to accelerate uranium production capacity by reopening mothballed capacity. For instance, in its latest trading update Canada’s Cameco noted that ramp up activities remain ongoing at its Key Lake mill despite challenges due to the length of time the facility was in a care and maintenance state. Sustained increases in the price of uranium are a clear
prospect, even should the geopolitical challenges recede. A programme of building new nuclear power plants, the widely anticipated wave of SMR production and deployment and factors like the return to operations of nuclear plants in Japan are clear evidence that demand for uranium with continue to grow in the coming years. Even as production capacity rises to reflect the higher prices seen today its understood that those prices will remain far higher than the historic floors seen a decade ago. ■
Above: Kazakhstan has seen its uranium production hit by a lack of sulphuric acid
www.neimagazine.com | April 2024 | 49
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