The trend of declining uranium exploration and mine development expenditure has been reversed – but substantial investment in new mining projects will be essential to meet nuclear power generation projections to 2050 and beyond, according to the latest edition of the key OECD/IAEA joint report.
Uranium 2024: Resources, Production and Demand is the latest edition of the uranium reference produced jointly by the OECD Nuclear Energy Agency (NEA) and the International Atomic Energy Agency. Commonly known as the Red Book, the first edition was published in 1965.
The data reported in the latest edition covers calendar years 2021 and 2022, drawn from 62 country reports on uranium exploration, resources, production and reactor-related requirements which are either prepared from officially reported government data and narratives, or by the secretariats of the two agencies. The report includes projections for nuclear generating capacity and reactor-related uranium requirements through to 2050, and discussion of long-term uranium supply and demand issues. Some information for 2023 and 2024 is also included in its discussions.
Total global uranium resources are largely unchanged compared with the previous edition of the Red Book, with just more than 7.9 million tU of total identified resources recoverable at up to USD260/kgU. Australia continues to dominate world resources, with 28% of identified recoverable resources at up to USD130/kgU and 24% of the identified recoverable resources at up to USD260/kgU, followed by Kazakhstan and Canada. Globally, 95% of total identified resources in the USD130/kgU category, and more than 90% in the USD260/kgU category, is located in just 15 countries.
But the overall picture for exploration and mine development expenditures has changed dramatically, with a “persistent downward trend” that had been seen from 2015 to 2020 coming to an end. “Annual expenditures, which decreased to approximately USD380 million in 2020 from more than USD1.5 billion in the years prior to the downturn, recovered to USD800 million in 2022,” the Red Book notes. “Preliminary data for 2023 expenditures suggest a further increase to USD840 million … Total expenditures reflect a response to the depressed uranium market that lasted from mid-2011, and a recent recovery that started in late-2020.”
Decreased expenditures from 2015 to 2020 were due to persistently low uranium prices that slowed exploration and mine development projects. Rising uranium prices and increased interest in nuclear energy since 2020 have reversed that trend, and total exploration and mine development expenditures for 2021, 2022 and preliminary estimates for 2023 amongst the 27 reporting countries came to USD2.1 billion. Expenditure in six countries – Canada, China, Russia, India, Namibia and Uzbekistan – accounted for 90% of the total, with Canada alone accounting for 34%.
After five years of declining uranium production as major uranium-producing countries limited their output in response to a depressed uranium market, global uranium production also increased from 2020 to 2022, the report said.
Globally, 49,490 tU was produced in 17 countries in 2022 – a 4% increase on 2020 – and increased still further to 54,345 tU in 2023. Kazakhstan remained the world’s largest producer, accounting for 43% of world production, followed by Canada, Namibia, Australia and Uzbekistan. In-situ leaching (ISL, also known as in-situ recovery) accounted for nearly 60% of global production in 2022, although the restart of the McArthur River underground mine in Canada meant that ISL’s share of production for 2023 was around 23%.
Global nuclear capacity is expected to increase in the coming years as energy demand grows, the report found, with growing electricity demand and also alignment with national energy security objectives among the key factors shaping this growth. East Asia is projected to experience the largest increase, with additional capacity between 90% and 220% of the 111 GWe of existing nuclear in the region at the end of 2022.
“Security of supply will be essential for further nuclear capacity expansion and will, in turn, result in greater uranium demand,” the report says. The current uranium resource base is sufficient to meet even high-demand projections to 2050 and beyond, but cumulative demand could exceed the world’s current known resource base by the 2080s under the high-demand scenario and the 2110s under the low-demand scenario.
“In the near term, if existing and committed mines operate near their stated production capacity, primary production is expected to meet low-demand scenarios through 2031. However, under high-demand scenarios, a production shortfall is anticipated by around 2027. While secondary sources will continue to supply a portion of uranium demand, it is crucial to bring new facilities online from planned and prospective production centres and to sustain exploration efforts to identify additional resources,” the report finds.
Historically, strong market signals have driven investment in uranium exploration, leading to the discovery and production of economically viable resources. Sustained strong market conditions will be essential to drive the necessary industrial development: “To bring in-ground resources into production, market conditions must offer confidence in project returns. Poor market conditions delay not only new supply but also exploration investments, which impacts long-term resource development. For sustained uranium supply, both consumers and producers must ensure a stable framework for uranium exploration, mining, and transportation, supported by pricing mechanisms that encourage long-term investments. Sustained, adequate uranium prices are essential to support both new projects and ongoing exploration, as global uranium demand could more than double by 2050 in a high-demand scenario and increase by 45% in a low-demand case.”
In response, exploration and mine development activities have increased, with some previously stalled projects nearing final investment decisions. About half of previously idled production capacity has returned to production, although remaining capacity may require higher prices to restart.
Reshaping the market
Geopolitical tensions are reshaping the uranium market, prompting some countries to build up domestic supplies or prioritise imports from allied or neutral countries, the report notes. But another driver is growing interest worldwide in nuclear energy due to the recognition of its importance for reaching net zero emission targets.
“Increasing global momentum for nuclear energy, driven by climate goals and commitments like the call by over 20 countries to triple global nuclear energy by 2050, which was first announced at the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28), suggests a positive outlook for uranium demand, particularly as small modular reactors (SMRs) gain traction,” the report notes.
In the longer term, advanced reactor designs and closed fuel cycles with recycling capabilities could potentially allow existing uranium resources to be exploited “for at least several centuries, ensuring the long-term sustainability of nuclear energy,” the report adds. Unconventional uranium sources, such as phosphate deposits and black shales, and innovative extraction technologies could further extend uranium availability – but, again, “sustained, adequate” uranium prices will be needed to justify investment in them.
“In conclusion, while sufficient uranium resources exist to meet demand for nuclear power generation in both low- and high-growth scenarios through 2050 and beyond, substantial investment in new mining projects will be essential. Given the long lead times for project development, identifying and advancing new projects in the near to medium term is crucial to avoid potential supply disruptions.”
Source: World Nuclear News
