The latest “Red Book” on uranium resources, jointly released by the OECD Nuclear Energy Agency (OECD/NEA) and the International Atomic Energy Agency (IAEA), warns that the global nuclear energy industry is poised for explosive growth, but the medium- to long-term uranium supply chain faces significant challenges.
The report reveals that while current uranium resource reserves are sufficient, immediate action is needed to initiate new mining exploration and construction of processing facilities to meet the fuel demands that will arise from the projected doubling of nuclear power plants over the next 30 years.
Global spending on uranium exploration and development has experienced a strong rebound in recent years, reaching $800 million in 2022, with preliminary data for 2023 further climbing to $840 million. Between 2020 and 2022, uranium production also increased by 4%, with Kazakhstan solidifying its position as the world’s largest producer, accounting for 43% of global production. In 2022, Kazakhstan’s uranium production even surpassed the combined output of the next four largest producers: Canada, Namibia, Australia, and Uzbekistan.
In an interview with METALS 100, James Sykes, CEO and Director of Baselode Energy Corp. (TSXV: FIND, OTCQB: BSENF), elaborated on the high-grade uranium assay results of the ACKIO prospect and funding for exploration, stating that the company has completed 43 drill holes for the 2024 drilling program. Baselode controls 100% of approximately 238,930 hectares for exploration in the Athabasca Basin area of northern Saskatchewan, Canada. The land package is free of any option agreements or underlying royalties.
Since 2022, the global nuclear energy industry has been heating up as countries race to deploy zero-carbon baseload power sources to meet new energy demands from AI data centers and other evolving needs.
According to predictive models, by 2050, global nuclear power capacity is expected to grow by 45% (low-demand scenario) to 130% (high-demand scenario). It is worth noting that these predictions are based on policies and plans formulated as of early 2023, and more countries have announced plans to return to nuclear energy or expand projects in the last two years.
In a recent report, U.S. investment bank Goldman Sachs highlighted that nuclear energy will serve as a core infrastructure to support power needs in the AI era. The rapid development of nuclear power is expected to drive a surge in uranium demand. Data show that as of January 1, 2023, globally identified recoverable uranium resources total 7.93 million tons, which can fully support the development of nuclear energy for the next several decades.
However, the report also underscores three major challenges facing the uranium supply chain: the typical decade-long lag between exploration and production; escalating geopolitical risks; and technical bottlenecks in constructing uranium processing facilities.
Compounding these issues, current uranium price levels are insufficient to support greenfield project development. Australian uranium company Deep Yellow recently announced a delay in its final investment decision for the Tumas project in Namibia. The company’s CEO, John Borshoff, stated that under the current price environment, new uranium mine development is nearly impossible. This highlights the investment predicament for the entire industry—nuclear utilities must accept higher uranium prices to attract sufficient capital into the supply chain.
Notably, the geopolitical landscape is reshaping the uranium trade map. While Kazakhstan continues supplying Western countries, its sales to China and Russia are increasing. At the same time, major tech companies in the U.S. and China are betting on small modular reactors (SMRs) to create 24/7 energy solutions for zero-carbon data centers, adding a new variable to the competition for uranium resources.
The report concludes with a call for immediate global action: timely investments in exploration and development, advancements in processing technology, and the establishment of new production centers are critical steps for ensuring uranium resources are delivered to market on time. Amid the dual waves of energy transition and the digital revolution, the “uranium resource clock” for the future of nuclear energy is now ticking.
