Renaissance of the uranium mining

Uranium market

The Fukushima disaster had a crucial impact on the uranium market. After it various countries phased out of nuclear energy. This resulted in a significant drop in the uranium price and further closing of uranium mines. From the beginning of 2020, the increase of the uranium price (with a significant increase in the last 8 months) has been visible. This change was caused by the decision of several governments to meet emission targets. That decision led to the present renaissance of nuclear energy. The rising demand for uranium has caused that many of the uranium mines which were closed, now need to be re-opened.

Reviving of closed mines

According to Bloomberg, five US producers are reviving closed mines. In 2023 Energy Fuels Inc. has initiated plans to restart operations in Arizona, Utah, and Colorado. Ur-Energy Inc. has also stated that it will dust off an idled mine in Wyoming. Moreover number of mid-sized companies in Australia and Canada have announced similar plans.

Most of the uranium (approximately 2/3 ) comes from Kazakstan, Canada, and Australia. It is expected that by the end of 2040, the ca. of 100000 metric tons of uranium will be needed to meet global demand. This means that the current processing and mining levels need to be doubled.

Key topic

The uranium subject was a key topic of conversation during this year’s Prospectors & Developers Association of Canada (PDAC). This event is known as the leading voice of the mineral exploration and development community whose work centers on supporting a competitive, responsible, and sustainable mineral sector. This year in Toronto at least 10 uranium companies, including Denison Mines Corp., Fission Uranium Corp., and IsoEnergy Ltd. were participating in the event.

More to come

Taking market changes under consideration Cameco Corporation and Kazatomprom which are responsible for more than half of the supply decided to increase production. Hovewer they have reported some problems in ramping it up. Kazatomprom has been increasing output after years of operating well below its capacity and Cameco is increasing its production in the mine and mill at MacArthur River and Key Lake. Furthermore, at the beginning of 2024, Denison Mines Corp. and Orano Canada announced that in 2025 they will restart the uranium operation at McClean Lake due to the investment in a proprietary mining method named SABRE.

Scott Melbye from the Uranium Energy Corp has indicated the supply squeeze and that “Demand is increasing again, with new reactors coming online.”

Challanges

Some challenges will be faced by small mines that are going to be re-opened or which are at the end of the life cycle predicts John Ciampaglia, CFA, FCSI from Sprott Asset Management USA. He has stated: “The industry is trying to respond with smaller mines reopening, but when you have a mine that hasn’t operated for that long, it’s obviously not very substantive”.

What we see is that the uranium market will fast change this year.