{"id":38182,"date":"2023-10-13T09:32:14","date_gmt":"2023-10-13T08:32:14","guid":{"rendered":"https:\/\/www.innovationnewsnetwork.com\/?p=38182"},"modified":"2023-10-13T09:32:14","modified_gmt":"2023-10-13T08:32:14","slug":"taking-action-in-the-uranium-market","status":"publish","type":"post","link":"https:\/\/www.innovationnewsnetwork.com\/taking-action-in-the-uranium-market\/38182\/","title":{"rendered":"Taking action in the uranium market"},"content":{"rendered":"
The spot price of uranium is up 180% in the last three years, from $25\/lb to $70\/lb in early October. In 2021, 440 nuclear plants globally used 74,000 tonnes of uranium oxide. 57,000 tonnes were mined and processed in 2021, with shrinking inventories providing the 17,000-tonne difference, according to the World Nuclear Association.1<\/sup><\/p>\n Uranium is used to make the fuel to run nuclear power plants that generate electricity. It is first mined and processed into yellowcake (uranium oxide in powdered form), which is then enriched to become nuclear fuel.<\/p>\n Today\u2019s world demands both drastic decarbonisation and much more electricity. Nuclear power is being embraced globally because it is safe, carbon free, and very reliable, which means more demand for uranium fuel.<\/p>\n To generate electricity, one enriched uranium fuel pellet \u2013 about the size of your fingertip, weighing ten grams \u2013 replaces one tonne of coal, 149 gallons of oil, or 17,000 cubic feet of natural gas, as well as having zero emissions, according to the Nuclear Energy Institute.2<\/sup><\/p>\n Therefore, more nuclear reactors are being constructed and commissioned globally. In August this year, 436 reactors were operable. Sixty-seven have come online in the last ten years, four thus far in 2023. Sixty are being built, and 120 more have gotten through the planning phase, according to the WNA. This means more uranium is being used every year.<\/p>\n Importantly, fundamentals in the uranium market indicate that the bull market is likely to continue. It takes ten or more years to get a uranium mine into production, according to Sprott Asset Management<\/a>.<\/p>\n With Russia\u2019s invasion of Ukraine in February last year, western utilities are continuing, but not extending, contractual imports of enriched uranium\/nuclear fuel from Rozatom, the Russian state uranium monopoly. At some point, Russia may stop all supplies from its uranium market to the West.<\/p>\n And pending Western legislation – for example, in the US, HR1042 in the House and ROS23164 in the Senate, together referred to as the Nuclear Fuel Security Act \u2013 could end it all as well.<\/p>\n Uranium is a strategic mineral. Nuclear provides 20% of the US power grid \u2013 communications, homes, businesses, factories, and now cars and trucks. Will US political leaders let the grid collapse? Unlikely.<\/p>\n With Russian supply waning, the uranium market has changed. Kazakhstan, Russia, and Uzbekistan produce 50-55% of the world\u2019s uranium today, and Russia enriches 45% of the world\u2019s nuclear fuel, per the WNA. The global uranium market, this year and last year, is divided into two markets, approximately 50% each between the Western world and Russia and its allies. This is demonstrated in the rising price of uranium.<\/p>\n The situation is dire. The opportunity is real. The last time the price of uranium surged strongly, in 2004\u20132007, the price peaked above $140\/lb, or above $200\/lb when adjusted for inflation. The time before that, in 1976\u20131977, it peaked at $173\/lb, inflation-adjusted to compare with today\u2019s prices.<\/p>\n Western-world producers are gradually increasing uranium production, and the hunt is on for developers with the potential for scale and low-cost, relatively near-term production.<\/p>\n Few investors are aware that Argentina has ambitions to be the South American nuclear sector leader. It already is in many regards.<\/p>\n Blue Sky Uranium Corp.(BSK.V; BKUCF.OTC) has already completed a Preliminary Economic Assessment (PEA) on its first uranium resource at Amarillo Grande, as stated in company news on 27 February 2019. The study demonstrates that the current deposit has the potential to produce uranium over a thirteen-year period, with an overall internal rate of return of 29%.<\/p>\n The project consists of a series of new uranium-vanadium discoveries made by BSK over 15 years along a 145km by 50km trend, or 90 miles long by 31 miles wide (1.5 times the size of Delaware) and covered by nearly 300,000 hectares of mineral rights. Blue Sky controls 100% of the project.<\/p>\n The area is semi-desert, with very little population and low environmental risk in the pro-mining, pro-nuclear Rio Negro Province. The project is road-accessible all year, shallow groundwater is plentiful, and power and rail are accessible.<\/p>\n Argentina is a leading centre of nuclear understanding and progress in South America, with an advanced nuclear industry, including: Yet, there is no uranium production in Argentina; all uranium is imported from Asia. Argentina has its own enrichment facilities processing the imported uranium into nuclear fuel for their operating plants.<\/p>\nWhy is nuclear power increasing in use?<\/h3>\n
Russia\u2019s supply currently off-limits to many<\/h3>\n
A genuine opportunity<\/h3>\n
Amarillo Grande project: Potential scale with a low-capital, low-cost profile
\n<\/strong><\/h3>\nArgentina and Rio Negro Province are nuclear-savvy<\/h3>\n
\n\u2022\u00a0\u00a0\u00a0 Three nuclear power plants in operation (three of the total five in South America);
\n\u2022\u00a0\u00a0\u00a0 Six research reactors;
\n\u2022\u00a0\u00a0\u00a0 Four particle accelerators;
\n\u2022\u00a0\u00a0\u00a0 A uranium purification plant;
\n\u2022\u00a0\u00a0\u00a0 One nuclear power plant under construction; and
\n\u2022\u00a0\u00a0\u00a0 Two additional plants are in planning, with two more under proposal.<\/p>\n