Outlook
To understand the outlook for uranium it is necessary
to consider recent history. Uranium is an unusual
commodity because a major portion of market demand
is met from sources other than new mine production.
From 1991 through 1999 about 215 000 tU, or over 40
% of the total world requirements, were met from non-mine
supplies. During the early part of this period a major
contribution came from drawdown of the commercial
inventory held by nuclear utilities. However, with
each year, the importance of other sources has been
an increasing. For example, during the period 1992
to 1999 a total of 96 700 tU was delivered to the
European Union from the NIS, with the bulk of this
material coming from Russia. During this period Russia
was also using around 5 700 tU annually for the production
of nuclear fuel for reactors of Russian design. A
total of about 30 900 t of Russian origin uranium
was purchased by US utilities from 1993 to 1999. Information
was not available for 1991 and 1992. Analysis indicates
that as much as about 115 000 t or more, of Russian
Federation stockpile origin uranium was either used
domestically, or sold over the period 1991 through
1999. This is equivalent to over 50% of the balance
of world uranium requirements met by non-mine supplies.
Another major source of uranium supply developed starting
in 1995. This supply is based on a government-to-government
agreement signed in February 1993 between the United
States and the Russian Federation concerning the disposition
and purchase of 500 t highly enriched uranium (HEU)
from dismantled nuclear weapons. From 1995 to 1999
about 24 300 tU (natural equivalent) was delivered
to the United States, leaving a balance of about 150
000 tU (natural equivalent) to be delivered. About
1 800 tU of the material delivered was purchased and
transferred to the United States Enrichment Corporation
(USEC) for sale. The balance was held in stockpiles
in the USA. In addition to the material from the Russian
Federation, the transfer of 50 t HEU from USDOE to
USEC was started in 1999. Other supplies that are
being used in place of new mine production include
re-enrichment of tails from the enrichment of uranium,
use of mixed oxide (MOX) fuel and re-processed uranium.
It is anticipated that most of these supplies will
continue to be available over the next 10 years or
so. The greatest uncertainty is the size of the stockpile
of natural and low enriched uranium in Russia, and
how long this stockpile will continue to supply world
markets. The Russian Federation has for nearly a decade
been one of the largest uranium market suppliers.
If this supply should end, or decrease significantly,
it will be necessary to increase the reliance on other
supplies to make up the shortfall. Furthermore because
of the ongoing closure of production facilities over
the last decade or more, there is relatively little
excess capacity, or flexibility, for mine production
to increase over the short term.
World uranium requirements were about 61 600 tU in
1999 and are projected to lie within a range of 54
500 – 79 800 tU/year by 2015. The annual production
capability in 1999 was 45 800 tU, or about 75% of
requirements. Projections based on available capability
developments and the phase-out of existing mines show
that the capabilities for 2015 may range between 42
000 and 62 000 tU/year.
The total world uranium resources could supply ample
quantities to cover the demands of existing and planned
nuclear power stations over the next decade. However,
because of the amount of anticipated supply from non-production
sources, it is expected that mine production will
continue to meet only a portion of the annual requirements
over the next five to ten years.
Provided that non-production supplies continue to
be available, the combination of mine and non-production
supply could meet the requirements. However, if there
is an unexpected interruption in supply a shortfall
could develop. This could lead to unstable market
conditions until the equilibrium between supply and
demand is re-established.
Projections of production capabilities of planned
and prospective centres supported by known resources
indicate that major producer countries could increase
their production from the current level by up to 30%
by 2005. Viewed optimistically, this would help ensure
that the supply remains in balance with the requirements.
However, market uncertainties may postpone decisions
regarding new facilities. Despite the uncertainties
about converting military stockpiles to civilian use
and the amount of weapons-grade material reaching
the commercial market, the need for newly produced
uranium will continue as long as nuclear electric
generation continues.
Douglas H. Underhill
International Atomic Energy Agency
Vienna
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