NUCLEAR FUEL CYCLE | CONFERENCE REPORT
Far left: Uranium mining production and inventory has been run down over recent years
Left: Yellow cake is now attracting commodity investors to the market
This session included preliminary analysis from a
forthcoming IAEA report looking at uranium inventories. Hanly said that data from the Euratom Supply Agency (ESA) and the US Energy Information Administration shows that 42,400 tonnes of uranium equivalent was held by European utilities in 2020 and about half that amount was held in the USA. European declared inventory equates to ESA’s recommended two-years’ worth of supply, but many individual utilities fall short of this benchmark, Hanly said. In the US this figure is about 16 months of supply. “A preliminary conclusion is that US utilities may have limited capability to independently manage a protracted supply disruption,” she added. Hanly also called for more transparency in inventory reporting and additional diversity in supplies. The IAEA report is due in early to mid-2023. Despite any potential increase in uranium supply risk
there was also a broad call to embrace nuclear power as a route to security of energy supply, especially given it is much more stable when compared with other more volatile energy resources from Russia such as gas. Desbazeille said that policymakers should look at
extending the operating life of the existing nuclear fleet, for example, reflecting the changing perspective of people, and describing it as a cheap and available alternative to gas. “In some countries, we see that public opinion tends to shift to a more positive view on nuclear and the role it can play,” he said. However, this is very much a decision that would be based on the in-country perspective, he noted, contrasting the situation in Germany with that of Belgium. “In Belgium,” he said: “73% of citizens are now supportive of the idea of prolonging the whole fleet”. In Germany, however, while it would technically be feasible to extend the operating lives of the existing reactor fleet, there is very strong political opposition. Constellation’s Murphy touched on the utility perspective noting that key risks are from the operational side, including factors like ensuring a reliable fuel supply stream, and risks from the financial side like market prices. Managing operational risks can include strategies like diversifying the supply chain both geographically and among supplier companies, as well as increasing inventory to weather any potential supply chain disruptions. He said
that while US utilities have historically maintained lower inventory levels than their European or Asian counterparts that may change in light of the changing perspectives on supply chain risk. However, he also counselled caution: “As an end user, you have to take long view and try to resist the – very human – urge to take immediate action. Sometimes, doing nothing is a strategy,” he observed, adding that decisions should not be taken in the moment but rather made “calmly and rationally”. The conclusion of the conference considered the role of financing in uranium markets, featuring Richard Allan, Managing director and COO of Bacchus Capital Advisors, Per Jander, Director of Nuclear and Renewables at WMC Energy, and Scott Melbye, CEO, President and Director at Uranium Royalty Corp. Brandon Munro, Chief Executive Officer and Managing
Director of Bannerman Energy and chairing the session, pointed to the impact of financial players and investors entering the uranium market. Indeed, Allan noted what he saw as the fundamental miss-pricing of uranium at $18-21/ lb in 2018 as part of the impetus to set up the Yellow Cake company which buys and stores uranium – and gives commodity traders an opportunity to participate in the uranium market. “This does attract capital and increases the efficiency of the allocation of capital through increased transparency and education,” said Allan. Melbye also highlighted the role of non-traditional
uranium buyers such as royalty investors. “It provides a diversified investment that allows them to be involved in the uranium story,” he said. “This is an industry that has been dialling back production and discouraging production in an over-supplied market over the 10-year bear market that we have gone through,” he said. But he also noted: “We’ve gone through all the highs and lows over the years but I think we are in the most exciting phase of the nuclear energy industry’s history in these years ahead of us”. Why invest in uranium? “This is an awfully attractive asset
on the balance sheet, acquiring uranium near the cycle lows,” Melbye said. The World Nuclear Fuel Conference, co-organised by the
Nuclear Energy Institute and World Nuclear Association, was being held in-person for the first time since 2019. ■
We operate on supply-demand fundamentals. We want good utility customers that will stick with us for five to ten years… so that we can confidently invest in our operations and run them
www.neimagazine.com | June 2022 | 17
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