home Supply, U How The Uranium Market Will Evolve For The Post-Pandemic Energy World

How The Uranium Market Will Evolve For The Post-Pandemic Energy World

The Uranium Committee  of the Energy Minerals Division of the American Association of Petroleum Geologists just released their draft 2020 Annual Report last week and the prices and supplies of U look pretty good.

The Uranium Committee monitors the global uranium industry activities, rare earth metals, and the production of electricity from nuclear power, because these drive uranium exploration and development in the United States and overseas. [Full Disclosure – I am a member of the Committee’s Advisory Group]

Modern technological societies require a lot of rare metals, such as lithium, cobalt, vanadium and neodymium, and uranium if you have nuclear power. In fact, there are 35 minerals that are critical to our society. Unfortunately, we don’t produce many of them in the United States, but are dependent on other countries like China for our supply.

This has been a recognized problem for years, but has become especially worrisome after this this pandemic has shown the flimsiness of our supply chains.

Senator Lisa Murkowski (R-AK) re-introduced her American Mineral Security Act specifically to strengthen those efforts. The bill, which was somewhat bipartisan, attempts to rebuild the domestic mineral supply chain through geological surveying, forecasting, workforce training, research and development, recycling, and a more efficient permitting process.

But uranium seems to be doing pretty well. The United States has more nuclear power plants than anyone else, and is the world’s largest producer of nuclear power, accounting for more than 30% of worldwide nuclear generation of electricity.

Our 96 reactors produce 20% of our own nation’s electricity, and requires about 25,000 tons of U each year to do so. In contrast, 624,000,000 tons of natural gas is used to generate 34% of our electricity, and 750,000,000 tons of coal for 30%. 1,000,000,000 tons of petroleum (7,200,000,000 barrels) fuels our transportation sector, the energy equivalent of 1,500,000,000 tons of coal.

But do we have enough U in North America to fuel our own nuclear future until that happens?

Fortunately for us and our northern neighbor and closest ally, the highest-grade U deposits in the world are found in the Athabasca Basin of Saskatchewan in Canada, often referred to as the “Saudi Arabia of Uranium”. And new deposits in this basin keep being discovered.

But a new U.S. uranium district has been identified in the eastern Seward Peninsula of Alaska on the eastern margins of McCarthy Basin. Thorium and rare-earth elements have been discovered in the surrounding igneous rocks, making it key to loosening China’s grip on our technological future.

Even Virginia has a huge untapped U deposit. Uranium supplies have not been a major issue since Canada and Australia have great sources and are close allies.

Uranium is leached from the original ore, either from crushed ore rock at an above-ground facility or directly underground by in situ leaching, to form U3O8 yellowcake (see figure above).

According to the United States Energy Information Administration, the USA produced a total of 170,000 lbs of U3O8 (65.4 tU) of uranium concentrate from all domestic sources in 2019, 89% less than on 2018, which itself was 33% less than in 2017. 2018 production was primarily from six facilities: five in-situ leach plants in Nebraska and Wyoming (Crow Butte Operation, Lost Creek Project, Ross CPP, North Butte, and Smith Ranch-Highland Operation) and one underground mine.

At the beginning of 2020, two conventional uranium mills – Shootaring Canyon Uranium Mill in Utah and Sweetwater Uranium Project in Wyoming – were on standby, and the White Mesa Mill in Utah was no longer producing uranium.

There’s lots and lots of U in the world, and more keeps being discovered. U resources increased about 25% over the last decade, which has kept prices low. We get most of our U from other countries, a diversity that serves us well in most thongs. But the sudden sight of our supply chains vulnerabilities in this pandemic has made some think that we should secure uranium from domestic sources.

We are also working hard to make extraction of U from seawater the real future of the U supply beyond this century, although it is a decade or two away from becoming economic. At that point, U supplies would last for billions of years, in effect, making nuclear completely renewable.

Uranium has outperformed major commodities this year, even as the energy sector has suffered from the coronavirus pandemic. MarketsInsider shows that a significant rise in uranium prices has been underway since the pandemic began, up to $34 from $24 per pound of U3O8, a price that had been pretty stable for over a year.

The uranium industry was excited last year about the Administration’s support of Section 232 of the Trade Expansion Act of 1962 that would protect the U.S. uranium mining industry. A White House task force is recommending that the federal government buy more uranium from domestic producers, mainly as a way to revive the U.S. uranium mining industry and in part as a way to address security concerns, although according to Sharon Squassoni at George Washington University those concerns are not warranted.

DOE might even create a new national uranium stockpile.

With these higher prices, many international companies are resuming extraction operations. Numerous discoveries of high-grade uranium deposits have been made in Canada and new low-grade deposits are under development in Argentina and Peru. The main Australian uranium mines in South Australia have resumed operations and mines in Western Australia are preparing to resume operations An undeveloped, new uranium “roll front” district has been identified in the eastern Seward Peninsula of Alaska with thorium and rare-earth elements.

Research funding by university and industry remains low in the United States, but state geological surveys (e.g., Wyoming and New Mexico) and the U.S. Geological Survey are moving forward with robust research on uranium and rare earths.

There is general agreement that substantial uranium (and thorium) will be available to fuel the United States as the world’s largest fleet of nuclear power. Although a few more reactors are scheduled for retirement on economic grounds and low-priced natural gas, the other reactors are operating even more efficiently, producing more power than before.

In addition, two new reactors are being completed in Georgia. Following a 30-year period during which no new reactors were built in the United States, it is expected that these two Vogtle units will come online soon after 2020.

Since mid-2007, there have been 16 license applications to build 24 new nuclear reactors, most of which are of the new small modular reactor (SMR) design.

So it seems that we have more uranium (U) than we need for hundreds of years of nuclear power as a big chunk of our energy generation. Which is critical, since we need to double nuclear power to address climate change and replace coal, even as we ramp up renewables.

Together with the fact that the nuclear industry has dealt with the pandemic better than most sectors, both uranium supply and nuclear power should not be much affected in the post-pandemic world.

Source: Forbes