ADELAIDE, Australia—Miners are struggling to get enough uranium out of the ground. That is helping to push prices of the nuclear fuel to nearly 16-year highs.
Cameco, one of the world’s biggest producers, recently said it may need to buy more uranium before the end of this year to meet obligations to customers after suffering setbacks at key mines. Production from Niger, following a military coup in July, and Kazakhstan have also fallen.
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Uranium, long thought to have seen its heyday pass, is enjoying a warm resurgence. Named for the planet Uranus, this radioactive element is increasingly in demand for use in nuclear power plants around the world.
After the Fukushima Daiichi reactor in Japan melted down in 2011, uranium prices fell to a decade-long low. As recently as 2015, uranium spot prices were just over US$18 per pound. But in 2020, the uranium market has been on an upswing, with prices climbing to more than US$35. Spot prices for March 2021 are hovering around US$32.
Why the increase in demand? Recent nuclear energy advances coupled with China’s commitment to ramp up nuclear power in the face of climate change have been good news for the uranium market. This, in turn, has fueled growth in uranium mining operations.
The National Mining Association reports that production of uranium-bearing ore in the United States has soared, with output at the four main domestic operations increasing from an annual average of 2.7 million pounds between 2012 and 2016 to over 4 million pounds in 2020.
But the growth in demand has outstripped production capabilities, leaving uranium miners struggling to keep up. While attempting to increase output, miners are also dealing with rising costs of extraction, processing, and transport.
In addition to boosting production, the industry is looking to alternative sources for uranium, such as sea water and mining uranium from shales and clays. But such strategies have yet to make significant gains, leaving the door open for more traditional production methods.
Uranium is finally running hot, and miners are doing their best to keep up with the demand. With any luck, rising output could soon bring some relief to the uranium market.
