The photo is sourced from riakchr.ru
The demand driver will be an increased interest in low-carbon energy. Nuclear power plants (NPPs) seem to be preferable to the wind and solar generators in terms of energy supply reliability: for example, in the United States in 2021, the average load of NPPs reached 92.7% while this figure was 34.6% for wind farms and 24.6% for solar panels according to the Energy Information Administration of the US Department of Energy (EIA). The Mordor Intelligence forecasts an annual average growth by 1.5% of the global installed capacity of nuclear reactors in 2022-2027.
The largest uranium producers – Kazakhstan which accounts for 41% of its global underground production, Australia (13%) and Namibia (11%) – will have to meet the demand for nuclear fuel. The other top seven uranium producers are Canada (8%), Uzbekistan (7%), Niger (6%) and Russia (6% according to the International Nuclear Association). Until recently, this included the United States, one of the four largest countries in terms of total uranium production during 1945 to 2020 (along with Canada, Uzbekistan and Kazakhstan).
However, in recent years, uranium production in the United States has been consistently declining from 1,537 tons in 2011 (the eighth largest in the world) to 1,256 tons in 2015 and only 6 tons in 2020. The restrictions imposed at the state level are one of the reasons: for example, in 2012, Arizona put a ban on public land mining. Uranium mining in an area of one million acres stretching around the Grand Canyon National Park fell under the ban. As a result, the US has become heavily dependent on uranium imports dominated by Canada (22%), Kazakhstan (22%) and Russia (14%, according to EIA 2020 data).
At the same time, reduction in the uranium production in the United States has exacerbated the shortage of raw materials in the world market. According to the data of the International Nuclear Association, in 2015, the underground mining provided 98% of the global demand for uranium, but in 2020, it was only 74%. As a result, the consumers had to look for alternative sources of raw materials, including the use of uranium from the civilian stocks, secondary enrichment of uranium tailings, and reduction of concentration of the isotope U235 used for nuclear weapons through dilution with depleted uranium.
In this regard, a temporary withdrawal of any global major supplier will hit NPPs throughout the global market but not only American NPPs for which, before production suspension in the United States, the imported uranium was cheaper than raw materials from the local suppliers ($38.1 per kg against $45.3 per kg according to the 2018 EIA data).
