SYDNEY / MELBOURNE – Uranium miners are scrambling to revive projects muted after the Fukushima disaster more than a decade ago, sparked by renewed demand for nuclear energy following Russia’s invasion of Ukraine and a surge in yellowcake prices.
Spot prices for uranium doubled from a low of 28 28 per pound last year to $ 64 in April, and projects have been crowded since the 2011 Fukushima nuclear power plant collapsed due to the 2011 earthquake and tsunami.
“Things are moving very fast in our industry, and we see countries and companies going back to nuclear with an appetite that I’m not sure I’ve ever seen in this four decades of my business,” said Tim Gitzel, CEO of Canada. Camaco, which mothballed four of its mines after Fukushima, said in an earnings call on May 5th.
Uranium prices began to rise in mid-2021 as several countries seeking to limit climate change said they aimed to return to nuclear power as a source of carbon-free energy.
A search for a secure power supply has added potential demand.
The unrest in Kazakhstan in January, which produced 45% of the initial global uranium production, had already pushed up prices further when Moscow’s February 24 attack on Ukraine encouraged a 50% rally.
Russia accounts for 35% of the world’s enriched uranium supplies.
Prices have plummeted since the peak of April, but John Siampaglia, CEO of Sprout Asset Management, which manages the Sprout Physical Uranium Trust, told Reuters that the Moscow attack “has dramatically shifted the energy market.”
“Now the theme is energy security, energy independence and the energy supply chain trying to move away from Russian sources,” he said.
According to the World Nuclear Association, there are about 440 nuclear power plants worldwide that require about 180 million pounds of uranium per year.
Uranium mines produce about 130 million pounds, a deficit that mining officials predict will increase even if the inactive capacity of major producers such as Camaco and Kazakhstan’s Kazatomprom is returned online.
The supply gap was filled by stockpiled material, most of which came from Russia.
Now, miners are studying the feasibility of mined mining and reviving projects.
In Australia, uranium producers, including Palladin Energy Ltd. – aiming to reopen its Langer Heinrich uranium mine in Namibia, which was idle a decade ago – have raised about $ 400 million ($ 282.08 million) in stock sales over the past six months to finance the exploration. Revive the mine.
Regal Funds Management Analyst James Ghomta says, “With all the additional demand from new nuclear (plants), the thesis is that in five or 10 years, that surplus demand will dwarf those volumes returning to the market.”
China plans to build 150 new reactors between 2020 and 2035, and Japan, like South Korea, aims to increase its nuclear capability.
In Europe, Britain has promised to build a new nuclear power plant every year, while France has plans to build 14 new reactors, and the European Union has offered to consider nuclear power as a green investment.
Hard to say easy?
However, the supply of new reactors will be a challenge as the supply chain problems after the epidemic and additional disruptions in the Ukraine war could lead to repeated delays and cost-increases, making it difficult to predict uranium demand.
Many environmentalists, especially in the West, oppose nuclear energy because it produces waste, even though it is emission-free.
Proponents of nuclear power say small modular reactors solve the problem of bringing new power.
Keith Boyes, managing director of Lotus Resources, who owns the Lazy Kylekera uranium mine in Malawi, says the modular reactor will be a major source of growth from 2028.
Others say the traditional barrier to high spending is no less a problem, given the sharp focus on supply security.
“Prices are no longer a determinant, it’s supply security now,” Duncan Kreib, managing director of Boss Resources, told McCurry Australia at the May 9 conference.
Boss will soon make a final investment decision to build a honeymoon uranium mine in South Australia, the first production target after 18 months of any progress.
Sprott’s Ciampaglia says uranium could be $ 100 per pound in the long run. In 2007 the price reached around $ 140 per pound.
This year’s gathering took their uranium funds to the level seen in 2011 as a result of sprout activity in the market, with growth from close to zero last year to about এখন 4 billion now.
Ciampaglia said Sprott’s purchase was in response to investor demand: “The trust provides investors with a vehicle to express their views on physical uranium.”
Smaller uranium developers also want to be involved, but will need a price of at least $ 60 per pound to ensure the economic viability of the projects, industry observers say.
Even then there will be risks. The resumption of passive power from uranium giants could inevitably hurt younger players while community opposition remains in some areas.
“It’s easy or challenging to develop a mine or reopen a dormant mine,” said Guy Keller, manager of the Nuclear Energy Opportunity Fund for Tribeca Investment Partners.
(1 = 1.4180 Australian dollars)
(Reporting by Veteran Menon and Sonali Paul; Editing by Barbara Lewis)