Exploration drives uranium resources up 17%

Tuesday, 3 June 2008

Current economic uranium resources will last for over 100 years at current consumption rates, while it is expected there is twice that amount awaiting discovery. With reprocessing and recycling, the reserves are good for thousands of years.

 

Uranium ore. There's plenty more where that came from

Worldwide around 5.5 million tonnes of uranium that could be economically mined has been identified. The figure is up 17% compared to that from the last edition of the Red Book because of a surge in exploration for uranium prompted by a dramatic price increase.

 

In addition to these identified resources, the category of uranium that could be expected to be found based on the geologic characteristics of known resources has grown by 500,000 tonnes to 10.5 million tonnes.

 

The data comes from Uranium 2007: Resources, Production and Demand - often known as the Red Book - published every two years by the OECD Nuclear Energy Agency (NEA) and the International Atomic Energy Agency (IAEA).

 

The Red Book figures are for deposits which could be mined for less than $59/lb. This compares to the current market spot price of around $70/lb. Based on 2006 nuclear electricity generation data, the 5.5 million tonnes of known uranium would be enough to sustain nuclear power's current contribution in electricity for more than a century.

 

For many years uranium traded for less than $15/lb, but the increase of interest in nuclear power together with the forthcoming end of an agreement to source uranium from dismantled nuclear weapons and speculation by investment funds led to a price spike.

 

From a starting point of $10/lb in May 2003, the price of uranium increased consistently until July 2007, when it reached a high of $138/lb. Spurred on by this strong price signal, expenditure on exploration rocketed to total over $774 million in 2006, an increase of over 250% compared to 2004. The NEA said exploration figures for 2007 would likely match those for 2006.

 

IAEA projections for the future of nuclear power see it expanding from 372 GWe today to 509-663 GWe by 2030. Such growth would cause an increase in uranium demand from 66,500 tonnes per year to between 94,000 and 122,000 tonnes. The NEA concluded that "currently identified resources are adequate to meet this expansion," noting that advanced reactors and the reprocessing and recycling of uranium "could increase the long-term availability of nuclear energy from a century to thousands of years."