Nuclear energy renaissance ignites uranium boom

Uranium prices are closing in on $100 a pound — a 10-fold increase in five years — and prices could climb sharply higher yet as more governments embrace atomic energy despite dwindling supplies of yellow cake to power the reactors.

The spot price for uranium jumped $4 to $95 a pound (lb), according to weekly report from UxC, a leading publisher of uranium prices, a big leap from $60 in December and from around $9.50 in late 2002.

Years of under-investment in uranium mining caused by moribund prices and the anti-nuclear lobby has left the world short of the material used to fuel nuclear reactors.
With prices moving higher, developers of reactors coming on stream in the next five to seven are looking to lock in prices right now for their “first fills” of uranium.

“All these first fills need to happen, and other reactors are running closer to capacity — nearer 90 percent from maybe 70 percent — which means increased fuel burn,” Carter said.

A new reactor takes a first fill of uranium of around 600 tonnes, then consumes 200 tonnes per year.

In 2006, uranium production was an estimated 103 million lbs, or 46,720 tonnes, while consumption was 177,000 lbs, or just over 80,000 tonnes.

This year, uranium demand is expected at about 183 million lbs and production is expected at about 117 million, said Alice Wong, a vice president at Cameco.

“Since 1985 uranium consumption has exceeded mine production and you can see it increasing by wider margins. So you’re looking at 20 years, or better, of consumption exceeding mine production,” Wong said.

Reuters