Everyone Seems to Want Uranium Right Now

A product has just gone up in price by 90% in 12 months. It now costs more than it has in 16 years. Most people would think twice about diving into a market like that.

Not so those who run a nuclear power plant and must have the product in question: uranium. Shutting the plant down will cost you a fortune, says Nick Lawson of advisory firm Ocean Wall. Think $1 million a day. It could also make you extremely unpopular, with one in five households in the US reliant on nuclear energy. Worse, if you do have to do it, you can’t flick a switch to turn it back on once your ore has arrived; restarting means new safety checks and regulatory approvals that can take months if not years.

That, along with the fact that uranium is a small part of the overall cost, is why the enriched uranium market is one of the most price inelastic in the world. If you need it, you really need it. The problem — which I imagine is keeping utility managers up most nights — is that an increasingly long list of other people do too.

Governments appear to have finally grasped that nuclear power is the only cheap and reliable low-carbon power available — and therefore the only thing that gives them a hope of getting anywhere near their rash net-zero promises. They know they won’t get there with unreliable, expensive and politically divisive wind turbines and solar panels — and (finally) the greens do too.

So the French have given up on their (stupid) plan to reduce the share of electricity generated by nuclear. The UK is (also finally) seriously discussing expanding nuclear capacity and has delayed the closure of four reactors. It has also announced plans to spend hundreds of millions of dollars on producing the high-assay low-enriched uranium (HALEU) we need for the small modular reactors that are to be our low carbon saviors. And the Chinese, say Alpha Portfolio Management, have 55 nuclear reactors, another 24 under construction and around 150 planned over the next 15 years.

At COP28, 22 countries committed to a trebling of nuclear capacity by 2050. The slightly scary result? Globally uranium demand is expected to rise by 28% by 2030 and to double by 2040.