Uranium price jumps to 15-yr high as top miner flags shorfall

The price of uranium has surged to its highest level in 15 years as the leading mining company raises concerns about a potential shortage.

Kazakhstan’s state-controlled uranium mining company, Kazatomprom, produces uranium both independently and through joint ventures. Recently, the company warned that it may fall short of its output targets in the next two years, causing uranium prices to soar to a nearly 15-year high.

Kazatomprom attributed the production challenges to shortages of sulfuric acid and construction delays at new deposits. The company expects these challenges to persist until 2025, and a comprehensive assessment of the impact will be provided by February 1st. Kazatomprom acknowledged that it may struggle to achieve 90% production levels compared to its subsoil use contract levels, despite actively seeking alternative sulfuric acid sources. Sulfuric acid is favored for extracting uranium from raw ore due to its cost-effectiveness and efficiency with various types of ores. The company also highlighted that supply snags and construction issues could affect its guidance for next year.

The current spot price of uranium is $97.45 per pound, more than double its price in 2023. This increase in price coincides with a commitment from 24 nations, including the US, Japan, Canada, UK, and France, to triple nuclear power capacity by 2050. China, which was not part of this commitment, continues to lead global nuclear plant construction and plans to increase capacity to 100 gigawatts by the end of the decade, with 22 of the 58 plants being built worldwide located in China.

In the US, recent legislation aimed at reducing reliance on Russian uranium, which currently supplies more than one-fifth of US uranium, could also impact uranium prices. The legislation requires the US to domestically source a portion of its nuclear fuel, specifically 20 tonnes of high-assay low-enriched uranium fuel, by the end of 2027. The bill is awaiting President Joe Biden’s approval. According to analysis by Bank of America and Berenberg Bank, the tightness in the uranium market is expected to drive prices above $100 in the near future.