<Back to main view
Rich uranium mineralisation at surface - Foxy Prospect.

 

Weak oxidation in reduced Karoo sandstone - Mtonya Uranium Deposit

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.

Uranium Resources

The IAEA sub-divides uranium resources into conventional and unconventional. Conventional resources are those that have an established history of production where uranium is a primary product, co-product or an important by-product (e.g. from the mining of copper and gold). Very low-grade resources or those from which uranium is only recoverable as a minor by-product are considered unconventional resources.

Based on the confidence level of estimate, conventional resources are classified as reasonably assured (an equivalent of measured and indicated under the CIM and JORC definitions and guidelines) or inferred.

Reasonably assured resources is that part of a mineral resource for which quantity, grade or quality, densities, geometry, and other pertinent physical characteristics are established with sufficient confidence to allow for appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The reasonably assured resource estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both favourable host-rock and grade continuity. Reasonably assured resources are sometimes referred to as demonstrated.

Inferred resources is that part of a mineral resource for which geological continuity has been established but grade, geometry, and other physical characteristics are considered to be inadequate to classify the resource as a reasonably assured resource.

The IAEA tracks identified conventional resources (reasonably assured and inferred) which can be extracted at a cost of less than USD 260/kgU (USD 100/lb U3O8).

Changes in identified resources 2009-2011 (Mlb U3O8) (Modified after IAEA Red Book 2012)

Resource Category20092011Change, Mlb U3O8Change, %
Identified (Total)
<USD 100/lb16,93118,4452,05412.5
<USD 50/lb14,04613,846(200)-1.4
<USD 36/lb9,7268,001(1,724)-17.7
<USD 18/lb2,0701,770(300)-14.5
Reasonably Assured
<USD 100/lb10,94811,3819739.3
<USD 50/lb9,1628,981(180)-2.0
<USD 36/lb6,5405,237(1,303)-19.9
<USD 18/lb1,4811,284(198)-13.3
Inferred
<USD 100/lb5,9837,0641,08118.1
<USD 50/lb4,8844,865(19)-0.4
<USD 36/lb3,1862,765(421)-13.2
<USD 18/lb589486(103)-17.5

The above table clearly shows that the nuclear power industry has been depleting the low-cost and easily accessible resources leading to a combined 33.6% reduction in the <USD 50/lb U3O8 category. This trend is further demonstrated by a 35.2% drop of reasonably assured resources in the <USD 50/lb U3O8 cost range. It must be noted that, according to the IAEA, some of the reduction in the lower cost ranges occurred because of the reclassification of resources to the higher cost categories.

Uranium Production

According to the World Nuclear Association, in 2012, the world mined an equivalent of 151.7 Mlb U3O8 (about 90% of the 169 Mlb annual demand).

36.5% of that production came from Kazakhstan - all of it produced by in-situ recovery operations at cash costs around USD 20 per pound. Kazakh uranium was produced by 6 ISR operations, each generating between 3 and 6 Mlb U3O8 per year.

In 2012, Canada produced 15.41% of the world supply and all of it came from two underground mines, McArthur River (approximately 20 Mlb U3O8) and Rabbit Lake (approximately 4 Mlb U3O8). Given the mining method and depths (below 500 m), Canadian production has relatively low cash costs due to extraordinarily high ore grades - 16.5% U3O8 at McArthur River (reserve grade, with dilution and mining losses factored in). The phenomenal richness of the ore can be demonstrated as follows: each metric tonne of ore contains almost 364 lb U3O8. Its revenue potential is a staggering USD14,550 per tonne of ore even at the market prices of USD 40 /lb U3O8. And at USD 70 /lb, it balloons to USD 25,460. At the same prices, for example, Olympic Dam, one of the richest mines in the world, is mining ore containing only about USD 370 worth of copper, uranium, gold, and silver per tonne of mill feed. At USD 70 /lb U3O8, one tonne of Roessing's 2009 reserve contains ore only worth about USD 48 in which the 85% processing recovery already factored in.
As Cameco reported 2012 cash costs at approximately USD 20/lb, along with a solid resilience of its mining operations, it signaled exceptionally high running costs and their susceptibility to grade fluctuations. Cameco's figures may also indicate the quality criteria to be met by new uranium projects in the Athabasca Basin as well as the appeal of ISR projects elsewhere.

Geology

While uranium is one of the most abundant elements in the Earth's crust, concentrated uranium ores are found in only a few places, usually in hard rock, such as granites or consolidated sediments, such as sandstone.

Uranium is commonly found as the mineral uraninite or pitchblende, a form of uraninite mixed with other minerals. It is usually black to steel black with a dull lustre. The most stable form is Triuranium octoxide (U3O8), better known as yellowcake, which is the concentrate most commonly derived from uranium mining operations.

Back to the top

Mining

Removing uranium ore from the ground can be undertaken in one of three ways, depending on how it is deposited. Open pit mining is used to extract uranium deposits close to the surface.

Underground mining methods are used for deep deposits. The known 'in situ leaching' (ISL) process injects chemicals to dissolve the uranium underground into a uranium-bearing solution that can be pumped to the surface for processing.