Column: Nuclear revival puts uranium back in the critical spotlight: Andy Home

Natsional'naya Atomnaya Kompaniya Kazatomprom AO

31/01/2025 24:00

(Repeats without change)
    By Andy Home
       LONDON, Jan 30 (Reuters) - Is uranium a critical
mineral? 
    Not according to the U.S. Geological Survey (USGS), which
dropped it from its critical minerals list in 2022 on the
grounds it didn't qualify because it was a "fuel mineral". 
    U.S. President Donald Trump wants it to think again. 
    One of Trump's many "Unleashing American Energy" directives
requires the Secretary of the Interior to instruct the director
of the USGS to "consider updating the survey's list of critical
minerals, including for the potential of including uranium."
    Inclusion on the list would open up federal funds and
fast-track permitting for domestic uranium projects.
    It seems curious that uranium has slipped through a legal
gap in the Energy Act of 2020, which stipulates only a "non-fuel
mineral" can be considered a critical mineral. 
    Uranium ticks many of the criticality boxes. It's
experiencing a step-change in demand, global supply is heavily
concentrated and the United States is almost totally import
dependent.     
    The uranium price reflects these changing dynamics. Last
year's frothy rally to a 16-year high of $106 per lb has
dissipated. But at a current price of $71 per lb, uranium is
still higher than at any point in the decade that followed the
2011 Fukushima disaster in Japan. 
    
    NUCLEAR COMEBACK
    Fukushima caused many countries to rethink the role of
nuclear in their energy mix but the threat of global warming has
brought nuclear power in from the cold. 
    The affirmation came at the COP28 summit in December 2023,
when more than 20 countries launched the "Declaration to Triple
Nuclear Power". 
    It was official recognition of "the key role of nuclear
energy in achieving global net-zero greenhouse gas emissions by
2050 and keeping the 1.5-degree goal within reach."
    Such green credentials likely don't count for much with the
Trump administration but Republicans view nuclear energy as a
core component of national security, meaning it enjoys
bipartisan support in the United States, albeit for different
reasons. 
    Big tech is also enthusiastic as it searches for ever more
power to feed its data centers. Microsoft  MSFT.O  signed a deal
with Constellation Energy  CEG.O  in September to help resurrect
a unit of the Three Mile Island nuclear plant in Pennsylvania.
    The re-embrace of nuclear power is a global trend. 
    Generation from the world's fleet of nearly 420 reactors is
on track to reach new heights in 2025, according to the
International Energy Agency (IEA). 
    Some 63 reactors are currently under construction, one of
the highest levels since 1990, and the lifetimes of over 60
reactors will be extended, the IEA said.
     
    SUPPLY STRESS
    The resurgence of nuclear power means the world is going to
need a lot more uranium and supply is already struggling to
match demand. 
    A decade of low prices has taken its toll, particularly in
the United States, where production fell from almost five
million lb in 2014 to just 21,000 lb in 2021, according to the
IEA. 
    Global uranium production is now heavily concentrated.
Kazakhstan, Canada and Australia accounted for around two-thirds
of global output in 2022, according to the World Nuclear
Association. 
    Indeed, one of the triggers for the January 2024 price spike
was a warning from Kazakhstan's Kazatomprom  KZAP.KZ , the
world's largest producer, it might not achieve production
targets due to a shortage of sulphuric acid.
    Market stress is compounded by political stress. 
    The United States is trying to break its dependence on
Russia for enriched uranium. Russian material accounted for 27%
of the enriched uranium supplied to U.S. commercial reactors in
2023. 
    The Joe Biden administration banned Russian imports, albeit
with waivers through 2027. Russia has responded by imposing
restrictions on shipments to the United States, also with
waivers.
    Complicating things further is Trump's threat to impose
tariffs on Canada, which is the largest supplier of uranium to
the U.S. market. 
    
    GOING CRITICAL
    The uranium market is recharged after a decade in
hibernation. 
    There was a lot of speculative froth in last year's price
spike with both institutional investors such as Goldman Sachs
and retail investment vehicles such as Sprott Physical Uranium
Trust  U_u.TO  chasing the rally. 
    But the uranium price remains historically high. The market
is pricing in a supply shortfall relative to demand from a
growing global fleet of nuclear reactors. 
    The United States has plenty of potential new supply
projects, many of them using leach technology, with which to
fill the gap. 
    How quickly they can be activated depends on the difference
between a critical mineral and a "fuel mineral" that is
increasingly critical. 
    
    The opinions expressed here are those of the author, a
columnist for Reuters

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Uranium resurgent after renewed commitment to nuclear power    https://tmsnrt.rs/3WCLJwy
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 (Editing by David Evans)
 ((andy.home@thomsonreuters.com, 44-207-542-4412 and on Twitter
https://twitter.com/AndyHomeMetals))