According to the WNA’s most recent report on nuclear energy, published just last week, nuclear energy capacity could increase by as much as 89% by 2035. The report covers numerous aspects of the nuclear energy industry and presents three levels of nuclear energy forecasts: lower, reference and upper. All three scenarios show the sector undergoing strong growth – not much of a surprise to anyone following the uranium and nuclear sectors. What I did find more interesting were some of these takeaways:
Combining all primary and secondary sources suggests that the uranium market should be adequately supplied in the period to 2025, provided that all mines currently under development and also most of the planned and prospective mines enter service as planned.
Make a note of the comment about planned and prospective mines entering service as planned and now read this section from the report:
World uranium production has stopped rising, falling to 56,250 tU in 2014. The currently depressed uranium prices have curtailed exploration activities and the opening of new mines; in some cases, existing mines have stopped production.
In other words, we already know that a number of planned and prospective mines will not enter service according to their original plan due to low uranium prices. So, the uranium market is not going to be adequately supplied unless prices start rising. Even more relevant to those of us with large, undeveloped deposits is report’s conclusion:
Rapid uranium demand growth in a number of countries, above all in China, coupled with a limited contribution of secondary supplies will result in the need for additional mined uranium within the period of the scenarios. Some mine development is proceeding despite the current depressed condition of the uranium mining industry. In the Reference and Upper Scenarios, additional mine supplies will be needed soon after 2025 and will require the development of ‘supply pipeline’ projects. Additional conversion and enrichment capacity is also likely to be needed in these scenarios Beyond 2025, further uranium production will be required if the Reference and Upper Scenarios for demand are to be satisfied.
One aspect of uranium supply that many people do not appreciate is how long it takes to put projects into production. Uranium is one of the most heavily permitted minerals in the mining industry and one of the most demanding.
Speak to mine engineers and geologists with uranium experience and they’ll tell you that the ball park figure to take a project from discovery to production of up to fifteen years. If the WNA projections and assumptions are accurate, the pressure to bring new sources online is going to intensify in the not-too-distant-future. Good news for companies with the right uranium projects….
Dev Randhawa, CEO of Fission Uranium