① The United States injected 2.7 billion US dollars into the uranium enrichment industry on Sunday in an attempt to build a domestic US uranium enrichment industry chain to get rid of Russian imports; ② In addition, at least five US producers are resuming mining in the US, showing the importance the US government attaches to the uranium and nuclear industry.
AFP, March 4 (Editor: Malan) As the world increasingly considers the use of nuclear energy to combat climate change, the demand for uranium, a key resource for nuclear power, has soared.
The International Atomic Energy Agency previously estimated that by 2040, the market will require more than 100,000 tons of uranium each year. This represents a nearly double increase in the amount of uranium extracted and processed from the current level.
This forecast is also reflected in uranium prices. The price of uranium ore futures has nearly doubled over the past year, rising from 50 US dollars per pound at the beginning of March last year to 95 US dollars now.
Meanwhile, about two-thirds of global production comes from Kazakhstan, Canada, and Australia. Due to the Fukushima nuclear accident, many countries have been reducing the use of uranium over the past few years, including the United States.
The gap between supply and demand for uranium resources, and the fact that most of the world's supply of enriched uranium is monopolized by Russia, yet bilateral relations between Russia and the US have reached a freezing point forced the US to urgently build up its domestic supply system.
On Sunday, the US government announced a government funding bill that will inject 2.7 billion US dollars into the US uranium enrichment industry, reflecting America's efforts to get rid of nuclear fuel imports from Russia.
The White House's funding will push nuclear reactor builders to buy enriched uranium directly from US producers, and the White House hopes to stimulate the restoration of America's nearly dormant uranium mining capacity by introducing more buyers.
Strategic focus
The US plan to rebuild the nuclear industry has been included in the 2022 Bipartisan Infrastructure Act. The goal is to create a market for the production of enriched uranium in the US, thereby getting rid of dependence on Russian highly enriched uranium.
At least five US producers are now restoring mines in states such as Wyoming, Texas, Arizona, and Utah.
Scott Melbye, executive vice president of American Uranium Energy, said uranium production has been slow to keep up with the pace due to insufficient investment in mining and exploration over the years. The company is reopening mines in Wyoming and Texas that have been idle since 2018.
Another company, Energy Fuels Inc., restarted operations in Arizona, Utah, and Colorado at the end of last year, while Ur-Energy Inc. said it would clean up an idle mine in Wyoming. Mid-sized Australian and Canadian companies have announced similar plans.
But these mines produce only a fraction of the world's uranium supply, and most of them are small and close to their useful life. John Ciampagli, CEO of Sprott Asset Management, notes that the industry is trying to resume small mine operations to meet demand, but it's unlikely that the problem will actually be solved.
To meet demand, US uranium producers forecast that in the next ten years, the US will need 8-10 new large-scale mines to enter production.
And this has also raised the alarm of existing uranium developers. Tom Price, a senior commodity analyst at London investment bank Libereum, said Kazatomprom in Kazakhstan and Cameco in Canada, as two of the world's giants, are increasing their mining volumes to crack down on small-scale miners. And this may cool down the uranium market to a certain extent.