Until 1985 uranium production was substantially in excess of nuclear power plant requirements with the surplus entering commercial and government stockpiles. Since 1985, production has failed to keep up with a significant increase in demand. This shortfall has been met through the running down of stockpiles, however these secondary sources are diminishing and mining will need to expand rapidly to meet the rising demand in the next few years.

Since Fukushima, many proposed uranium mining projects have been postponed and exploration has dropped significantly. In addition projects are generally becoming more technically challenging and the regulatory environment more onerous. There is an emerging consensus that uranium prices will need to rise substantially in order to incentivise new supply.

This will have an impact in coming years and coincides with an acceleration in world nuclear power capacity. Analysts forecast the impact from this reduction in supply to be felt from 2014 and place upward pressure on uranium prices.

Further information on uranium supply can be found here: http://world-nuclear.org/info/Nuclear-Fuel-Cycle/Mining-of-Uranium/World-Uranium-Mining-Production/

 

Security of Supply

As the global demand for energy intensifies, many countries are becoming increasingly aware of the need to diversify their energy mix and to lock in secure, long-term energy supplies.

Nuclear reactors require a significant upfront investment as they are designed to generate large amounts of electricity over a long period of time. The following characteristics are appealing to utilities seeking a secure supply of uranium:

  • Scale / long mine life
  • Significant annual production
  • Low technical risk
  • Reliable supply route / proven jurisdiction
  • Consistent economics
  • Solid, advanced projects
  • Proven management team