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- The world is experiencing a nuclear energy renaissance, with global capacity expanding and driving a significant increase in uranium demand.
- China and Russia have secured substantial uranium supplies, particularly from key producers like Kazakhstan, creating a challenge for the West.
- The United States and Europe are facing an aging nuclear infrastructure and supply chain vulnerabilities, forcing them to reconsider their strategies for securing uranium.
This year, the world will generate more nuclear energy than it ever has before. “The market, technology and policy foundations are in place for a new era of growth in nuclear energy over the coming decades,” the International Energy Agency (IEA) wrote in a report published last month. This nuclear renaissance comes as public and private sectors galvanize in support of nuclear energy expansion as nuclear presents an increasingly convincing solution to keeping pace with energy demand growth without compromising decarbonization targets.
“It’s clear today that the strong comeback for nuclear energy that the IEA predicted several years ago is well underway, with nuclear set to generate a record level of electricity in 2025,” stated IEA Executive Director Fatih Birol. “In addition to this, more than 70 gigawatts of new nuclear capacity is under construction globally, one of the highest levels in the last 30 years, and more than 40 countries around the world have plans to expand nuclear’s role in their energy systems.”
This global expansion means that demand for nuclear fuel is about to go through the roof. As nuclear energy increasingly gains favor around the world, uranium demand is expected to far outpace supply, creating a tight market and heightened competition to ink deals within existing supply chains. The World Nuclear Association projects that demand for uranium will grow 28 percent by 2030 and nearly double by 2040, with far-ranging consequences for global markets.
And so far, it looks like the West might be losing the uranium race. With the exception of pro-nuclear France, the nuclear energy sector in the United States and Europe have been in serious decline over the last few decades. The U.S., while still the largest nuclear energy producer in the world, has zero nuclear plants currently under construction and is currently facing the reality of an aging fleet that will require a lot of plants to be retired in coming years, and miles of red tape preventing rapid buildout of younger plants. Germany, Europe’s largest economy, has made phasing out nuclear energy a central platform of its energy policy.
Now, nuclear energy is returning to favor in the United States and much of Europe, but they are returning to a market that China and Russia never faded from. And not only do Russia and China have longer and deeper ties in many of the world’s uranium markets, they’re also playing much more aggressively.
“Russian and Chinese players have been very keen to secure access to resources in central Asia and Africa, creating a very aggressive competitive environment,” Benjamin Godwin at Prism Strategic Intelligence recently told the Financial Times. Huge suppliers such as Kazakhstan are rerouting their uranium supplies to Beijing and the Kremlin, leaving North America and Europe scrambling.
Reports indicate that around two-thirds of sales by Kazakhstan’s state-owned mining group Kazatomprom went to Russia, China, and domestic markets in 2021. That represents a two-fold increase compared to 2021. Conversely, trade with the West has tanked. In 2021, 60 percent of Kazatomprom’s exports went to US, Canadian, French and UK buyers. In 2023, that rate had fallen to just 28 percent.
“We’re on a depletion curve that I don’t think many customers have realised,” Cory Kos, vice-president of investor relations at Cameco, the biggest western supplier of uranium, told the Financial Times. Kos indicated that this is thanks to “more flows of material into China.”
The impacts of this supply crunch could be far reaching, potentially causing geopolitical shifts. Changing global markets and volatility in Uranium stocks “may change how the U.S. and Europe secure uranium as rising demand stresses current supply lines,” TipRanks recently reported. “This could force them to consider local sources and create alliances to better compete with China and Russia.”
By Haley Zaremba for Oilprice.com
The post Is the West Losing the Race for Uranium? appeared first on Energy News Beat.
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