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11 countries are responsible for 97 % of the global uranium extraction in 2007.

The uranium market, like all commodity markets, has a history of volatility, moving not only with the standard forces of supply and demand, but also to whims of geopolitics. It has also evolved particularities of its own in response to the unique nature and use of this material.

The only significant commercial use for uranium is to fuel nuclear reactors for the generation of electricity. There are 440 reactors operating worldwide, and a total of 69 new reactors that are under construction or planned for completion within the next 10 years (as of January 2006).

Before uranium is ready for use as nuclear fuel in reactors, it must undergo a number of intermediary processing steps which are identified as the front end of the nuclear fuel cycle: mining it (either underground or in open pit mines), milling it into yellowcake, enriching it and finally fuel fabrication to produce fuel assemblies or bundles. This technologically complicated and challenging process is simple in comparison to the complexity of the market that has evolved to provide these three services.


Available supply

The Estimate of Available Uranium depends on what resources are included in the estimate. The squares represent relative sizes of different estimates, whereas the numbers at the lower edge show how long the given resource would last at present consumption.
██ Reserves in current mines[1]
██ Known economic reserves[2]
██ Conventional undiscovered resources[3]
██ Total ore resources at 2004 prices[1]
██ Unconventional resources (at least 4 billion tons, could last for millennia)[3]

The world's present measured resources of uranium, economically recoverable at a price of USD$130/kg, are enough to last for some 80 years at current consumption.[2]

In 1983, physicist Bernard Cohen proposed that the world supply of uranium is effectively inexhaustible, and could therefore be considered a form of renewable energy.[4][5] He claims that fast breeder reactors, fueled by naturally-replenished uranium extracted from seawater, could supply energy at least as long as the sun's expected remaining lifespan of five billion years.[4] These reactors use uranium-238, which is more common than the uranium-235 required by conventional reactors.

Market operations

Unlike other metals such as copper or nickel, uranium is not traded on an organized commodity exchange such as the London Metal Exchange. Instead it is traded in most cases through contracts negotiated directly between a buyer and a seller. Recently, however, the New York Mercantile Exchange announced a 10-year agreement to provide for the trade of on and off exchange uranium futures contracts.

The structure of uranium supply contracts varies widely. Pricing can be as simple as a single fixed price, or based on various reference prices with economic corrections built in. Contracts traditionally specify a base price, such as the uranium spot price, and rules for escalation. In base-escalated contracts, the buyer and seller agree on a base price that escalates over time on the basis of an agreed-upon formula, which may take economic indices, such as GDP or inflation factors, into consideration.

A spot market contract usually consists of just one delivery and is typically priced at or near the published spot market price at the time of purchase. However 85% of all uranium has been sold under long-term, multi-year contracts with deliveries starting one to three years after the contract is made. Long-term contract terms range from two to 10 years, but typically run three to five years, with the first delivery occurring within 24 months of contract award. They may also include a clause that allows the buyer to vary the size of each delivery within prescribed limits. For example, delivery quantities may vary from the prescribed annual volume by plus or minus 15%.

One of the peculiarities of the nuclear fuel cycle is the way in which utilities with nuclear power plants buy their fuel. Instead of buying fuel bundles from the fabricator, the usual approach is to purchase uranium in all of these intermediate forms. Typically, a fuel buyer from power utilities will contract separately with suppliers at each step of the process. Sometimes, the fuel buyer may purchase enriched uranium product, the end product of the first three stages, and contract separately for fabrication, the fourth step to eventually obtain the fuel in a form that can be loaded into the reactor. The utilities believe – rightly or wrongly – that these options offers them the best price and service. They will typically retain two or three suppliers for each stage of the fuel cycle, who compete for their business by tender. Sellers consist of suppliers in each of the four stages as well as brokers and traders. There are fewer than 100 companies that buy and sell uranium in the western world.

In addition to being sold in different forms, uranium markets are differentiated by geography. The global trading of uranium has evolved into two distinct marketplaces shaped by historical and political forces. The first, the western world marketplace comprises the Americas, Western Europe and Australia. A separate marketplace comprises countries within the former Soviet Union, or the Commonwealth of Independent States (CIS), Eastern Europe and China. Most of the fuel requirements for nuclear power plants in the CIS are supplied from the CIS's own stockpiles. Often producers within the CIS also supply uranium and fuel products to the western world, increasing competition.

The SWU (separative work unit)

Separative Work Unit (SWU) is a complex unit which is a function of the amount of uranium processed and the degree to which it is enriched, ie the extent of increase in the concentration of the 235U isotope relative to the remainder. Separative work is expressed in SWUs, kg SW, or kg UTA (from the German Urantrennarbeit )

The unit is strictly: Kilogram Separative Work Unit, and it measures the quantity of separative work (indicative of energy used in enrichment) when feed, tails and product quantities are expressed in kilograms.

The number of Separative Work Units provided by an enrichment facility is directly related to the amount of energy that the facility consumes. Modern gaseous diffusion plants typically require 2,400 to 2,500 kilowatt-hours of electricity per SWU while gas centrifuge plants require just 50 to 60 kilowatt-hours of electricity per SWU.


A large nuclear power station with a net electrical capacity of 1,300 MW requires about 25,000 kg of enriched uranium annually with a 235U concentration of 3.75%. This quantity is produced from about 210,000 kg of raw uranium using about 120,000 SWU. An enrichment plant with a capacity of 1,000 kSWU/year is, therefore, able to enrich the uranium needed to fuel about eight large nuclear power stations

Cost Issues

In addition to the Separative Work Units provided by an enrichment facility, the other important parameter that must be considered is the mass of raw uranium that is needed in to order to yield a desired mass of enriched uranium. As with the number of SWUs, the amount of feed material required will also depend on the level of enrichment desired and upon the amount of 235U that ends up in the depleted uranium. However, unlike the number of SWUs required during enrichment which increases with decreasing levels of 235U in the depleted stream, the amount of raw uranium needed will decrease with decreasing levels of 235U that end up in the tails.


In the production of enriched uranium for use in a light water reactor it is typical for the enriched stream to contain 3.6% 235U (as compared to 0.7% in raw uranium) while the depleted stream contains 0.2% to 0.3% 235U. In order to produce one kilogram of this enriched uranium it would require approximately 8 kilograms of raw uranium and 4.5 SWU if the tails stream was allowed to have 0.3% 235U. On the other hand, if the depleted stream had only 0.2% 235U, then it would require just 6.7 kilograms of raw uranium, but nearly 5.7 SWU of enrichment. Because the amount of raw uranium required and the number of SWUs required during enrichment change in opposite directions, if raw uranium is cheap and enrichment services are more expensive, then the operators will typically choose to allow more 235U to be left in the tails stream whereas if raw uranium is more expensive and enrichment is less so, then they would choose the opposite.


The world's top uranium producers are Canada (28% of world production) and Australia (23%). Other major producers include Kazakhstan, Russia, Namibia and Niger [1]. Purification facilities are almost always located at the mining sites. The facilities for enrichment, on the other hand, are found in those countries that produce significant amounts of electricity from nuclear power. Large commercial enrichment plants are in operation in France, Germany, Netherlands, UK, USA, and Russia, with smaller plants elsewhere. These nations form the core of the uranium market and influence considerable control over all buyers. The uranium market is a classic seller's market. The uranium cartel, as it became known, was the alliance of the major uranium producing nations. Representatives of these five countries met in Paris, France in February, 1972 to discuss the "orderly marketing" of uranium. Although sounding innocuous, they had, amongst themselves, a monopoly in the uranium market and were deciding to exercise it.

Global demand for uranium rose steadily from the end of World War II, largely driven by nuclear weapons procurement programs. This trend lasted until the early 1980s, when changing geopolitical circumstances as well as environmental, safety, economic concerns over nuclear power plants reduced demand somewhat. The production of a series of large hydro-electric power stations has also helped to depress the global market since the early 1970s. This phenomenon can be traced back to the construction of the vast Aswan Dam in Egypt, and to a certain extent with the ambitious Three Gorges Dam in China. During this time, large uranium inventories accumulated. In fact, until 1985 the Western uranium industry was producing material much faster than nuclear power plants and military programs were consuming it. Uranium prices slid throughout the decade with few respites, leaving the price below $10 per pound for yellowcake by year-end 1989.

As uranium prices fell, producers began curtailing operations or exiting the business entirely, leaving only a few actively involved in uranium mining and causing uranium inventories to shrink significantly. Since 1990 uranium requirements have outstripped uranium production. World uranium requirements are expected to increase steadily throughout the next decade to a peak of over 200 million pounds of yellowcake.

However several factors are pushing both industrialized and developing nations towards alternative energy sources. The increasing rate of consumption of fossil fuel is a concern for nations lacking in reserves, especially non-OPEC nations. The other issue is the level of pollution produced by coal-burning plants, and despite their vastness, an absence of economical methods for tapping into solar, wind-driven, or tidal reserves. Uranium suppliers hope that this will mean an increase in market share and an increase in volume over the long term.

Uranium prices reached an all-time low in 2001, costing US$7/lb. This was followed by a period of gradual rise, followed by a bubble culminating in mid-2007 which caused the price to peak at around 137$/lb.[6] This was the highest price (adjusted for inflation) in 25 years [2]. The higher price during the bubble has spurred new prospecting and reopening of old mines. Cameco and Rio Tinto Group are the top two producing companies (with 20% of the production each), followed by Areva (12%), BHP Billiton (9%) and Kazatomprom (9%).

See also


  1. ^ a b Herring, J.: Uranium and thorium resource assessment, Encyclopedia of Energy, Boston University, Boston, USA, 2004, ISBN 0-12-176480-X. (Fells, 2004)
  2. ^ a b NEA, IAEA: Uranium 2005 – Resources, Production and Demand. OECD Publishing, 2.6.2006, ISBN 9789264024250.
  3. ^ a b R. Price, J.R. Blaise: Nuclear fuel resources: Enough to last?. NEA News 2002 – No. 20.2, Issy-les-Moulineaux, Ranska.
  4. ^ a b Cohen, Bernard L. (1983-01). "Breeder reactors: A renewable energy source" (PDF). American Journal of Physics 51 (1): 75–76. doi:10.1119/1.13440. Retrieved 2007-08-03.  
  5. ^ McCarthy, John (1996-02-12). "Facts from Cohen and others". Progress and its Sustainability. Stanford. Retrieved 2007-08-03.  
  6. ^ Andrew Mickey (2008-08-22). "Uranium Has Bottomed: Two Uranium Bulls to Jump on Now". Retrieved 2009-11-23.  

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