Part 2 of 2 Parts (Please read Part 1 first)
     The rapid price increase of uranium in 2021 marked a significant turnaround after the uranium mining industry was plagued by oversupply following the decline in nuclear power generation after the Fukushima disaster. Industry executives have also pointed to other factors that are bolstering the long-term prospects of nuclear power. These factors will take longer to feed through into uranium prices increases.
     The U.S. Inflation Reduction Act included tax credits for existing nuclear power reactors. This is likely to lead to applications for extension to the lifetimes of the U.S. commercial reactor fleet. In South Korea, nuclear energy policy underwent a reversal under the new Yoon Suk-yeol administration. The new administration took power last May and intends to expand the Korean nuclear industry instead of phasing it out as pursued by the previous administration.
     Publicly listed uranium mining companies have also benefited from the optimism of investors. Canada’s Cameco is the second largest uranium producer. Its share price is close to a record high after increasing almost thirty percent since the middle of August. Grant Isaac is the senior vice-president of Cameco. He said, “We’re on pace to have the biggest contracting year since Fukushima. We’re seeing this balanced energy policy translating into legislative action. It’s no longer just words.”
     Even though the uranium price has surged due to improve sentiment, the commodity remains vulnerable to a squeeze on supplies from Russia. Russia is the largest builder of new nuclear power plants in the world. It accounts for only five percent of global uranium production. However, it is responsible for over forty percent of active worldwide enrichment capacity. This information was provided by research firm Berenberg. To create useful nuclear fuel, mined uranium must be converted and then enriched. Berenberg analysts said that “The removal of Russia from the global nuclear fuel chain has the potential to be a source of disruption and price volatility.”
     Kazatomprom is the biggest uranium miner in the world. In August, it raised its 2024 output target due to expectation of greater demand for nuclear fuel as utilities seek to diversify energy supplies away from Russia. Askar Batyrbayev is the chief commercial officer at the Kazakhstan-based company. He said that a decision by western powers to sanction Russian nuclear fuel would trigger great upheaval in the uranium market. He went on to say, “If we need to replace the entire Russian supply, then it might require an additional 10,000 tonnes to be supplied. This is half of our annual production in Kazakhstan. It’s quite a challenge, but it could be achievable if we have these requests in advance.”
     Nuclear industry executives are also concerned that the ballooning momentum behind nuclear power could collapse once again if its safety credentials are called into question. Patrick Fragman is the chief executive of Westinghouse, a US nuclear power company. He recently spoke at the World Nuclear Symposium in London. He added that. “Public opinions will go back to the dark ages and be an open avenue for coal.”