On MIT's Uranium Study

Yesterday, MIT released a study that the Globe and Mail described this way:

Growing global competition for scarce enriched uranium threatens to derail a much-heralded nuclear renaissance in the United States and around the world, says an industry researcher from the Massachusetts Institute of Technology.

In a report released yesterday, MIT researcher Thomas Neff said there has been 20 years of under-investment in uranium production and enrichment, resulting in a tightening of supply that has driven prices up eightfold.

The shortfall leaves a gap between the potential increase in demand for nuclear energy -- which is particularly strong in Asia -- and the ability to supply fuel for it.

"There has been a nuclear-industry myopia; they didn't take a long-term view," Mr. Neff said in his report.

Others have since picked up the story. This is an issue we've looked at before, so I though I'd check in with Felix Killar, one of our internal experts on the nuclear fuel cycle.

The following graph [above] was produced by IAEA. It is based on international data which provides the ability of uranium to meet the demand between now and 2050. It assumes that the production of electricity from nuclear power plants will triple by 2050 from today. Reasonably Assured Reserves is the uranium which has already been identified as being recoverable at reasonable costs. The Inferred Reserves are quantities of uranium which the industry has good data to support its existence, however, the data is not sufficient to put the reserves in the Reasonably Assured list. Note this table was generated prior to the price the industry is experiencing today on the uranium spot market.

In short we do not have a uranium problem. The industry does have a tight uranium market because uranium mining was in the decline due to low uranium prices and inventory liquidations. This was enhanced by the lost of 8 million pounds of annual production from Cigar Lake has been deferred for a time period due to the cave in at that mine. The industry is also short about 4 million pounds of uranium from the Ranger mine due to rains which stopped production and will require time to return the mine to full production.

Don’t equate tight market conditions to an inability to have sufficient uranium to meet demand.

Thanks to Felix for answering so promptly. NIOF has more.