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Uranium Market Overview: Demand Expected to Continue to Rise for the Foreseeable Future

Today, there are over 430 commercial nuclear reactors connected to the grid in 31 countries with a net generating capacity of 372 GWe requiring approximately 65 thousand tonnes of uranium (or 76.6 thousand tonnes U3O8), as measured by uranium acquisitions. These nuclear reactors generate 11% of the world’s electricity (WNA, October 2013).

The International Atomic Energy Agency (IAEA) Secretariat projects the electricity demand grow by 2035 to between 540 Gwe (low demand case) and 746 Gwe (high demand case), including the recent change of policies announced by Belgium, Italy, Germany, and Switzerland that followed the Fukushima incident. Still, this is an increase of 44% and 99%, respectively. Hence, the world’s demand for nuclear fuel is projected to rise to between 97,645 tU and 136,385 tonnes uranium by 2035 (IAEA, Red Book 2012).

The World Nuclear Association reports that in addition the 432 operating reactors, there are 70 reactors under construction (30 of which are in China), 173 reactors are planned, and 314 reactors proposed (WNA, October 2013).

The countries of East Asia are anticipated to build between 100 GWe and 150 GWe of new generating capacity, representing increases of over 125% to more than 185%, respectively.

A considerable increase of nuclear capacity at between 55% and 125% is also projected for non-EU European countries. Other regions with projected growth include the Middle East and Southern Asia, Central and South America, Africa, and Southeastern Asia. The new entrants to the nuclear power club include such countries as United Arab Emirates (2 reactors under construction and 4 planned), Turkey (4 new reactors planned), and Vietnam (4 reactors planned). Saudi Arabia is proposing to build 16 reactors, while Italy is proposing 10, and UAE -10 (WNA, October 2013).

In the United Kingdom, there are currently 16 operating nuclear reactors (10 GWe generating capacity) that supply approximately 19% of the country's electricity - 70 TWh of the total 363 TWh produced in 2012. At the same time, the country imported 12 TWh from France, mostly nuclear power (WNA, 2013).

Until earlier 2013, according to the British Government, two of the stations would be closing in 2016: Hinkley Point B in Somerset, England, and Hunterston B in north Ayrshire, Scotland, both of which came into operation in 1976. However, EDF, the French owner and operator of the British reactors, successfully applied for a seven-year extension to the lives of the two stations. The closing date for them has now changed on the Government website to 2023, but this could extend again to 2030, provided safety is still not an issue. If the British Government is successful with its plans of building eight new large nuclear stations, the country will be generating nearly 50% of its electricity from nuclear power (Scientific American, September 2013).

The International Energy Outlook Report published by the US Department of Energy in July 2013 projects the strongest growth [Reference case] in nuclear power for the countries of non-OECD Asia, which average 9.2% per year from 2010 to 2040, including average increases of 10.2% per year in China and 10.6% per year in India. China leads the region with 43% of the world’s active reactor projects under construction in 2011 and installs the most nuclear capacity over the period, building 160 Gwe of net generation capacity by 2040. Outside Asia, the largest increase in nuclear generation is in OECD Europe, at a relatively modest average rate of 0.7% per year. Worldwide, nuclear generation increases by 2.5 percent per year in the Reference case (USDoE, July 2013).

In North America, nuclear capacity is projected to grow by between 7% and 28% but in the European Union could either decrease by 11% or increase by 24%, depending principally on the implementation of nuclear phase-out policies. The high case assumes that at least some of the phase-out policies are eased (IAEA, Red Book 2012).

According to DoE's 2013 Outlook Report, the rate of growth in nuclear power generation worldwide is slower than in previous IEO projections. High capital and maintenance costs may keep some countries from expanding their nuclear power programs, while a lack of trained labor resources, concerns about safety, and limited global nuclear supply chain capability could keep national nuclear programs from meeting previously planned schedules (USDoE, July 2013).

These factors are likely to act as a dampening factor on the nuclear generating capacity build-out and and keep uranium prices from sky-rocketing, which, in turn, may prevent the development of low-grade, remote, or refractory uranium resources (e.g., phosphate-hosted deposits, shale-hosted deposits, or deep underground deposits) and stimulate exploration and development of high-grade open-pittable resources and deposits amenable to in-situ recovery.