The uranium market, like all commodity markets, has a history of volatility, moving with the standard forces of supply and demand as well as geopolitical pressures. It has also evolved particularities of its own in response to the unique nature and use of uranium.
Historically, uranium has been mined in countries willing to export, including Australia and Canada. [2] [3] However, countries now responsible for more than 50% of the world’s uranium production include Kazakhstan, Namibia, Niger, and Uzbekistan. [4]
Uranium from mining is used almost entirely as fuel for nuclear power plants. Following the 2011 Fukushima nuclear disaster, the global uranium market remains depressed, with the uranium price falling more than 50%, declining share values, and reduced profitability of uranium producers since March 2011. As a result, uranium companies worldwide have reduced capacity, closed operations and deferred new production. [5] [6]
Before uranium is ready for use as nuclear fuel in reactors, it must undergo a number of intermediary processing steps that are identified as the front end of the nuclear fuel cycle: mining it (either by ISL or by mining and milling into yellowcake); enriching it; and finally fuel fabrication to produce fuel assemblies or bundles.
The world's top uranium producers in 2017, representing 71% of total production, were Kazakhstan (39% of world production), Canada (22%) and Australia (10%). Other major producers included Niger, Namibia and Russia. [7] [8] Initial treatment facilities to produce uranium oxide are almost always located at or near the mining sites. The facilities for enrichment, on the other hand, are found in those countries that produce significant amounts of electricity from nuclear power. Large commercial enrichment plants are in operation in France, Germany, Netherlands, UK, United States, and Russia, with smaller plants elsewhere. [8]
Global demand for uranium rose steadily from the end of World War II, largely driven by nuclear weapons procurement programs. This trend lasted until the early 1980s, when changing geopolitical circumstances as well as environmental, safety, and economic concerns over nuclear power plants reduced demand. The construction of a series of large hydro-electric power stations has also helped to depress the global market since the early 1970s. This phenomenon can be traced back to the construction of the vast Aswan Dam in Egypt. During this time, large uranium inventories accumulated. Until 1985 the Western uranium industry was producing material much faster than nuclear power plants and military programs were consuming it. Uranium prices slid throughout the decade, leaving the price below $10 per pound for yellowcake by year-end 1989. [9]
As uranium prices fell, producers began curtailing operations or exiting the business entirely, leaving only a few actively involved in uranium mining and causing uranium inventories to shrink significantly. Since 1990 uranium requirements have outstripped uranium production. World uranium requirements increased steadily to 65,014 tonnes (140 million pounds) in 2017. [7] [10]
Several factors are pushing both industrialized and developing nations to seek alternatives to fossil fuels. The increasing rate of consumption of fossil fuel is a concern for nations lacking in reserves, especially non-OPEC nations, as is the pollution produced by coal and gas-burning power plants. On the other hand, it is still difficult to tap economically into the world's vast solar, wind, and tidal energy reserves. Uranium suppliers hope that these factors will drive an increase in uranium production due to demand for nuclear power generation. [11]
Uranium prices reached an all-time low of US$7/lb in 2001. This low was followed by a period of gradual rise, followed by a bubble culminating in mid-2007, with the price to peaking at around US$137/lb, [12] the highest price (adjusted for inflation) in 25 years. [13] The higher price during the bubble has spurred new prospecting and reopening of old mines. In 2012 Kazatomprom and Areva were the top two producing companies (with 15% of the production each), followed by Cameco (14%), ARMZ Uranium Holding (13%) and Rio Tinto (9%). [14]
Following the shutdown of many nuclear power plants after the Fukushima Daiichi nuclear disaster in 2011, demand fell to about 60 kilotonnes (130×10 6 lb ) per year in 2015 with future forecasts uncertain. [15]
Because of the improvements in gas centrifuge technology in the 2000s, replacing former gaseous diffusion plants, cheaper separative work units have enabled the economic production of more enriched uranium from a given amount of natural uranium, by re-enriching tails ultimately leaving a depleted uranium tail of lower enrichment. This has somewhat lowered the demand for natural uranium. [15] [16]
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Unlike other metals such as copper or nickel, uranium is not traded on an organized commodity exchange such as the London Metal Exchange. Instead it is traded in most cases through contracts negotiated directly between a buyer and a seller. 2007, however, the New York Mercantile Exchange announced a 10-year agreement to provide for the trade of on and off exchange uranium futures contracts. [17]
The structure of uranium supply contracts varies widely. Pricing can be as simple as a single fixed price, or based on various reference prices with economic corrections built in. Contracts traditionally specify a base price, such as the uranium spot price, and rules for escalation. In base-escalated contracts, the buyer and seller agree on a base price that escalates over time on the basis of an agreed-upon formula, which may take economic indices, such as GDP or inflation factors, into consideration.
A spot market contract usually consists of just one delivery and is typically priced at or near the published spot market price at the time of purchase. However 85% of all uranium has been sold under long-term, multi-year contracts with deliveries starting one to three years after the contract is made. Long-term contract terms ranges 2–10 years, but typically run 3–5 years, with the first delivery occurring within 24 months of contract award. They may also include a clause that allows the buyer to vary the size of each delivery within prescribed limits. For example, delivery quantities may vary from the prescribed annual volume by ±15%.
One of the peculiarities of the nuclear fuel cycle is the way in which utilities with nuclear power plants buy their fuel. Instead of buying fuel bundles from the fabricator, the usual approach is to purchase uranium in all of these intermediate forms. Typically, a fuel buyer from power utilities will contract separately with suppliers at each step of the process. Sometimes, the fuel buyer may purchase enriched uranium product, the end product of the first three stages, and contract separately for fabrication, the fourth step to eventually obtain the fuel in a form that can be loaded into the reactor. The utilities believe—rightly or wrongly—that these options offers them the best price and service. They will typically retain two or three suppliers for each stage of the fuel cycle, who compete for their business by tender. Sellers consist of suppliers in each of the four stages as well as brokers and traders. There are fewer than 100 companies that buy and sell uranium in the western world.
In addition to being sold in different forms, uranium markets are differentiated by geography. The global trading of uranium has evolved into two distinct marketplaces shaped by historical and political forces. The first, the western world marketplace comprises the Americas, Western Europe and Australia. A separate marketplace comprises countries within the former Soviet Union, or the Commonwealth of Independent States (CIS), Eastern Europe and China. Most of the fuel requirements for nuclear power plants in the CIS are supplied from the CIS's own stockpiles. Often producers within the CIS also supply uranium and fuel products to the western world, increasing competition.
As of 2015, total identified uranium resources were sufficient for more than a century of supply based on current requirements. [19]
In 1983, physicist Bernard Cohen proposed that the world supply of uranium is effectively inexhaustible, and could therefore be considered a form of renewable energy. [21] [22] He noted that fast breeder reactors, fueled by naturally-replenished uranium extracted from seawater, could supply energy at least as long as the sun's expected remaining lifespan of five billion years. [21] These reactors would use uranium-238, which is more abundant than the uranium-235 required by conventional reactors.
The CANDU is a Canadian pressurized heavy-water reactor design used to generate electric power. The acronym refers to its deuterium oxide moderator and its use of uranium fuel. CANDU reactors were first developed in the late 1950s and 1960s by a partnership between Atomic Energy of Canada Limited (AECL), the Hydro-Electric Power Commission of Ontario, Canadian General Electric, and other companies.
Nuclear power is the use of nuclear reactions to produce electricity. Nuclear power can be obtained from nuclear fission, nuclear decay and nuclear fusion reactions. Presently, the vast majority of electricity from nuclear power is produced by nuclear fission of uranium and plutonium in nuclear power plants. Nuclear decay processes are used in niche applications such as radioisotope thermoelectric generators in some space probes such as Voyager 2. Generating electricity from fusion power remains the focus of international research.
Enriched uranium is a type of uranium in which the percent composition of uranium-235 has been increased through the process of isotope separation. Naturally occurring uranium is composed of three major isotopes: uranium-238, uranium-235, and uranium-234. 235U is the only nuclide existing in nature that is fissile with thermal neutrons.
A nuclear power plant (NPP) is a thermal power station in which the heat source is a nuclear reactor. As is typical of thermal power stations, heat is used to generate steam that drives a steam turbine connected to a generator that produces electricity. As of September 2023, the International Atomic Energy Agency reported there were 410 nuclear power reactors in operation in 31 countries around the world, and 57 nuclear power reactors under construction.
Areva S.A. is a French multinational group specializing in nuclear power headquartered in Courbevoie, France. Before its 2016 corporate restructuring, Areva was majority-owned by the French state through the French Alternative Energies and Atomic Energy Commission (54.37%), Banque publique d'investissement (3.32%), and Agence des participations de l'État (28.83%). Électricité de France, of which the French government has a majority ownership stake, owned 2.24%; Kuwait Investment Authority owned 4.82% as the second largest shareholder after the French state.
Rosatom, also known as Rosatom State Nuclear Energy Corporation, the State Atomic Energy Corporation Rosatom, or Rosatom State Corporation, is a Russian state corporation headquartered in Moscow that specializes in nuclear energy, nuclear non-energy goods and high-tech products. Established in 2007, the nonprofit organization comprises more than 350 enterprises, including scientific research organizations, a nuclear weapons complex, and the world's only nuclear icebreaker fleet.
The Megatons to Megawatts Program, also called the United States-Russia Highly Enriched Uranium Purchase Agreement, was an agreement between Russia and the United States whereby Russia converted 500 metric tons of "excess" weapons-grade uranium into 15,000 metric tons of low enriched uranium, which was purchased by the US for use in its commercial nuclear power plants. The official name of the program is the "Agreement between the Government of the Russian Federation and the Government of the United States of America Concerning the Disposition of Highly-Enriched Uranium Extracted from Nuclear Weapons", dated February 18, 1993. Under this Agreement, Russia agreed to supply the United States with low-enriched uranium (LEU) obtained from high-enriched uranium (HEU) found to be in excess of Russian defense purposes. The United States agreed to purchase the low-enriched uranium fuel.
A nuclear fuel bank is reserve of low enriched uranium (LEU) for countries that need a backup source of LEU to fuel their nuclear reactors. Countries that do have enrichment technology would donate enriched fuel to a "bank", from which countries not possessing enrichment technology would obtain fuel for their power reactors.
Since the mid 1980s, the largest source of electricity in France has been nuclear power, with a generation of 379.5 TWh in 2019 and a total electricity production of 537.7 TWh. In 2018, the nuclear share was 71.67%, the highest percentage in the world.
Uranium mining is the process of extraction of uranium ore from the ground. Over 50 thousand tons of uranium were produced in 2019. Kazakhstan, Canada, and Australia were the top three uranium producers, respectively, and together account for 68% of world production. Other countries producing more than 1,000 tons per year included Namibia, Niger, Russia, Uzbekistan, the United States, and China. Nearly all of the world's mined uranium is used to power nuclear power plants. Historically uranium was also used in applications such as uranium glass or ferrouranium but those applications have declined due to the radioactivity of uranium and are nowadays mostly supplied with a plentiful cheap supply of depleted uranium which is also used in uranium ammunition. In addition to being cheaper, depleted uranium is also less radioactive due to a lower content of short-lived 234
U and 235
U than natural uranium.
World Nuclear Association is the international organization that promotes nuclear power and supports the companies that comprise the global nuclear industry. Its members come from all parts of the nuclear fuel cycle, including uranium mining, uranium conversion, uranium enrichment, nuclear fuel fabrication, plant manufacture, transport, and the disposal of used nuclear fuel as well as electricity generation itself.
Techsnabexport, internationally known as TENEX, is an overseas trading company owned by Russian state-owned company Rosatom. Techsnabexport is an exporter of enriched uranium and a supplier of nuclear fuel cycle products.
National Atomic Company Kazatomprom Joint Stock Company (Kazatomprom) (Kazakh: Қазатомөнеркәсіп, romanized: Qazatomónerkásip) is the world’s largest producer and seller of natural uranium, providing over 40% of global primary uranium supply in 2019 from its operations in Kazakhstan. Kazatomprom's uranium is used for the generation of nuclear power around the world.
Nuclear power construction costs have varied significantly across the world and in time. Large and rapid increases in cost occurred during the 1970s, especially in the United States. Recent cost trends in countries such as Japan and Korea have been very different, including periods of stability and decline in costs.
Nuclear power is the fifth-largest source of electricity in India after coal, gas, hydroelectricity and wind power. As of November 2020, India has 22 nuclear reactors in operation in 8 nuclear power plants, with a total installed capacity of 7,380 MW. Nuclear power produced a total of 43 TWh in 2020–21, contributing 3.11% of total power generation in India. 10 more reactors are under construction with a combined generation capacity of 8,000 MW.
Energy consumption across Russia in 2020 was 7,863 TWh. Russia is a leading global exporter of oil and natural gas and is the fourth highest greenhouse emitter in the world. As of September 2019, Russia adopted the Paris Agreement In 2020, CO2 emissions per capita were 11.2 tCO2.
Ukraine operates four nuclear power plants with 15 reactors located in Volhynia and South Ukraine. The total installed nuclear power capacity is over 13 GWe, ranking 7th in the world in 2020. Energoatom, a Ukrainian state enterprise, operates all four active nuclear power stations in Ukraine. In 2019, nuclear power supplied over 20% of Ukraine's energy.
Radioactive ores were first extracted in South Australia at Radium Hill in 1906 and Mount Painter in 1911. 2,000 tons of ore were treated to recover radium for medical use. Several hundred kilograms of uranium were also produced for use in ceramic glazes.
Reprocessed uranium (RepU) is the uranium recovered from nuclear reprocessing, as done commercially in France, the UK and Japan and by nuclear weapons states' military plutonium production programs. This uranium makes up the bulk of the material separated during reprocessing.
In Argentina, about 10% of the electricity comes from 3 operational nuclear reactors: Embalse, a CANDU reactor, and Atucha I and II, two PHWR German designs.