Part 2 of 2 Parts (Please read Part 1 first)
    The third critical risk covered in the new report is a permanent reduction of production and a withdrawal from uranium exploration. This mainly results from economic constraints. In the past few years, the uranium market has been volatile. Currently, the global supply of uranium is plentiful and the prices are low and stable. Unfortunately for future supply, this availability of cheap uranium can cause a reduction in production of the uranium mining industry in order to stabilize or increase prices by avoiding further excess production. Low prices can also hamper the desire of investors to invest in uranium exploration. Such exploration is needed to discover and dig new mines to replace mines which are being exhausted. This will be needed for future demand growth.
     The new report said, “When market conditions are unfavorable, the mining company may decide to reduce production, put a mine under care and maintenance or shut it down for good. … If the impact on market prices is not as expected, a permanent closure of the mine will follow a first reduction of production. The lack of investment in new mines and withdrawal from uranium exploration may have consequences on the market in the medium and long-term, leading to an imbalanced market between production and demand of uranium.”
     The report suggests that the two major measures that power utilities should take to mitigate supply chain risks consists of maintaining strategic uranium reserves and diversify supply options.
     With respect to transport, the report says that it would be helpful to simplify procedures and reduce administrative burdens in order to save time and resources. Developing a project for licensing the companies that transport nuclear materials that is common for the territory of all European Union members would reduce the administrative burden and lead to more cost-effective and less time-consuming shipments. The report says the in order to address the specific issue of a lack of transportation hubs open to nuclear shipments, alternative routes should be developed as well as the possible use of dedicated charter vessels.
    The report says, “It is also important to make different stakeholders aware of the excellent safety record of the transport of radioactive materials.”  The maintenance of “appropriate levels” of inventories by European Union utilities and producers would mitigate risks of nuclear fuel supply shortages in the short term. Long-term investments in new facilities are also needed.
     The Euratom Supply Agency is mandated under the Euroatom Treaty to ensure that all the users in the European Union receive a reliable and equitable supply of uranium ore and nuclear fuels. Members of the Working Group on Prices and Security of Supply are drawn from nuclear generators and fuel cycle companies of various European Union countries.
    Other countries share some of these same problems and are working on solutions. The U.S. government is currently involved in building up a strategic reserve of uranium that will be supplied by U.S. uranium producers who currently supply less uranium than foreign suppliers.