Production and Demand
Uranium is primarily used to fuel nuclear reactors for the generation of electricity. Nuclear power is the third highest contributor to global electricity generation (at 17% of supply) and has remained relatively constant at between 15 to 17% since the 1980s as the productivity of reactors has increased with global electricity consumption. The three countries with the highest rate of uranium production are currently Canada, Kazakhstan and Australia with 20.5%, 19.4% and 19.2% respectively.
According to the OECD/NEA, total global ‘Identified Resources’ of uranium increased by 17% in 2007 (to 4,456,000 tonnes of uranium metal) in the less than US$80/kg U category compared to their 2005 levels. A portion of this increase relates to new discoveries but the majority is from re-evaluations of previously ‘Identified Resources’ in light of the effects of higher uranium prices on cut-off grades. Assuming the 2006 rate of uranium consumption, the current ‘Identified Resources’ are sufficient for some 100 years of supply.
Uranium production in 2006 totalled some 39,603 tU. This represents a 6% decrease from the 41,943 tU produced in 2005 and 1.5% less that the 40,188 tU produced in 2004.
While production declined overall between 2004 and 2006, significant increases were recorded in Kazakhstan (42%) and the United States (albeit from a relatively low base of less than 1,000 tU). More modest increases (about 8%) were recorded in Niger and Uzbekistan and reduced production was recorded in Australia, Canada, the Russian Federation and South Africa owing to a combination of lower than expected ore grades, extreme weather events and technical difficulties.
At the end of 2009, world uranium production (48,510 tU) provided about three quarters of world reactor requirements (66,500 tU), with the remainder being met by supplies of already mined uranium (so called secondary sources) including excess government and commercial inventories, the delivery of low enriched uranium arising from the down-blending of highly enriched uranium (HEU) derived from the dismantling of nuclear warheads, re-enrichment of depleted uranium tails and spent fuel reprocessing.
In 2010, a total of 436 commercial nuclear reactors were operating with a net generating capacity of about 370 GWe requiring about 66,500 tU per annum. By the year 2030, world nuclear capacity is projected to grow to between about 509 GWe (low demand case) and 663 GWe (high demand case). Accordingly, world reactor-related uranium requirements are projected to rise to between 93,775 tU and 121,955 tU by 2030.
As currently projected, primary uranium production capabilities could satisfy projected high case world uranium requirements, however, actual production has declined in recent years but increased in 2009, and in order for production to meet future demand, mine expansions and openings must proceed as planned and production will need to be maintained at full capability. This is considered unlikely, as illustrated by mine development setbacks and production difficulties experienced in recent years. Therefore, to ensure demand is met, secondary sources will continue to be necessary. Although information on secondary sources is incomplete, they are widely expected to decline in importance and be largely unavailable beyond 2015. As secondary supplies are reduced, reactor requirements will need to be increasingly met by mine production.
The introduction of alternate uranium fuel cycles, if successfully developed and implemented, will impact the market balance, but it is uncertain how effective and widely implemented these proposed fuel cycles will be. What is clear is that a sustained strong demand for uranium will be needed to stimulate the timely development of production capability and to increase Identified Resources. Long lead-times required to identify new resources and to bring them into production (typically of the order of ten years or more), gives rise to the potential for the development of uranium supply shortfalls and continued upward pressure on uranium prices.
World demand for electricity is expected to continue to grow rapidly over the next several decades to meet the needs of an increasing population and economic growth. The recognition by many governments that nuclear power can produce competitively-priced base-load electricity, combined with the role that nuclear energy can play in enhancing security of energy supplies, has increased the prospects for growth in nuclear generating capacity, although the magnitude of that growth remains uncertain.