Construction of New Nuclear Power Plants is Being Accelerated
Predictions are always uncertain, especially when they concern the future, as Mark Twain once warned. However, on one point, most futurists and analysts are quite certain today: The world’s electricity demand will rise significantly in the coming years.
In emerging and developing countries, an ever-growing middle class is emerging. They own more electrical devices and will naturally want to use them. This automatically increases the electricity demand in these countries. Therefore, populous countries like China and India are already focusing on expanding their energy supply.
In the West, there’s a dream of increasingly pushing back the use of fossil fuels in favor of more electric drives. For this dream not to end in the nightmare of ongoing blackouts, a lot of emphasis must be placed on ensuring sufficient power supply today. Not only experts recognize the need for action, but also policymakers.
Outside of Germany, policymakers are already reacting and accelerating the construction of new nuclear power plants
They are therefore demanding and promoting the expansion of electricity generation through nuclear energy. This has the advantage of not emitting CO2 on the one hand and being capable of providing base load power on the other, which wind turbines and solar plants cannot claim. Last year, more than 40 countries committed to or acknowledged building new nuclear power plants and operating existing facilities longer. The goal is to triple nuclear power capacity by 2050.
In addition to the classic large reactors, a multitude of smaller reactors – the so-called ‘Small Modular Reactors’, or SMRs for short – will be used in the future. They are manufactured modularly in factories and are intended to be installed at almost any desired location. It is therefore already foreseeable today that the demand for uranium, which is already high, will increase significantly again in the coming years.
This is indeed a problem because factories and data centers can be built relatively easily and quickly, but mines cannot. Their development has always been associated with longer approval times. But unlike copper, lead, or zinc, uranium and thorium are radioactive elements. Higher requirements are therefore placed on their production worldwide. These are reflected, among other things, in longer approval times, as the requirements that a uranium producer must meet to get a mine approved are significantly higher than those of a company that ‘only’ wants to mine copper or lead.
Long lead times prevent many uranium mines from going into production quickly
Lead times of more than ten years are therefore not exceptions, but the rule. In addition, due to the extremely low uranium prices of the last decade, many mines were closed. Restarting them is possible in principle. But that also takes time, and this should be calculated in years rather than months.
During the 2010s, uranium demand was already higher than mine production. The resulting deficit was covered by the then well-stocked inventories of energy suppliers. Today, however, these inventories are almost empty. The two largest uranium producers, Kazatomprom and Cameco, therefore reported last year that their 2025 production is already sold out. This means, conversely, that not much can go wrong with production this year.
Otherwise, despite the contracts already concluded, some power plant operators end up empty-handed after all. This is not out of the question, as Kazatomprom in particular was not only unable to increase its uranium production last year. Moreover, due to technical problems, production even had to be reduced. Cameco, as the industry’s number two, was also unable to fill this gap at short notice.
The uranium market is already tight today and threatens to become even tighter in the coming years
The consequence was a massive deficit. While the exact production figures for 2024 are not yet available, estimates suggest that supply of about 155 million pounds of triuranium octoxide (U3O8) was faced with a demand of 195 million pounds of U3O8. Industry experts estimate that by 2030 alone, approximately 500 million pounds of triuranium octoxide will be missing.
The implications for a market that cannot rely on any fuel other than uranium are obvious. In the past, it was common in the industry to work with fixed US dollar amounts for a pound of uranium, even in long-term contracts. In the meantime, however, the industry is working with contracts that provide for minimum prices and dynamic price adjustments.
This small detail clearly shows how tight the uranium market already is today, and any investor who recognizes the signs of the times can already imagine how tight the uranium market will become in just a few years. Therefore, not only the major uranium producers Cameco and Kazatomprom are interesting, but also smaller uranium companies such as
