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The Future of Uranium: A Story of Supply and Demand

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The following content is sponsored by Standard Uranium.

uranium supply and demand

The Future of Uranium: A Story of Supply and Demand

The uranium market is at a tipping point.

Since the Fukushima accident in 2011, uranium prices have been on a downtrend, forcing several miners to suspend or scale back operations. But nuclear’s growing role in the clean energy transition, in addition to a supply shortfall, could turn the tide for the uranium industry.

The above infographic from Standard Uranium outlines how uranium’s demand and supply fundamentals stack up, and how that balance could change the direction of the market in the future.

The Uranium Supply Chain

The supply of uranium primarily comes from mines around the world, in addition to secondary sources like commercial stockpiles and military stockpiles.

Although uranium is relatively abundant in the Earth’s crust, not all uranium deposits are economically recoverable. While some countries have uranium resources that can be mined profitably when prices are low, others do not.

For example, Kazakhstan hosts roughly 1.2 billion lbs of identified recoverable uranium resources extractable at less than $18 per lb, more than any other country. On the contrary, Australia hosts a larger resource of uranium but with a higher cost of extraction. This varying availability of resources affects how much uranium these countries produce.

Country2019 production (lbs U)% of Total
Kazakhstan 🇰🇿50,282,97342.1%
Canada 🇨🇦15,308,88112.8%
Australia 🇦🇺14,579,15212.2%
Namibia 🇳🇦11,250,1769.4%
Uzbekistan 🇺🇿7,716,1706.5%
Niger 🇳🇪6,730,7055.6%
Russia 🇷🇺6,393,3985.3%
China 🇨🇳3,527,3923.0%
Ukraine 🇺🇦1,653,4651.4%
India 🇮🇳881,8480.7%
South Africa 🇿🇦762,7990.6%
United States 🇺🇸147,7100.1%
Rest of the World 🌎308,6470.3%
Total119,543,315100%

It’s not surprising that Kazakhstan is the largest producer of uranium given its vast wealth of low-cost resources. In 2019, Kazakhstan produced more uranium than the second, third, and fourth-largest producers combined.

Canada produced around one-third of Kazakhstan’s production despite the suspension of the McArthur River Mine, the world’s largest uranium mine, in 2018. Australia was the world’s third-largest producer with just two operating uranium mines.

However, production figures do not tell the entire story, and it’s important to look at how the market price of uranium impacts supply.

How Uranium Prices Affect Supply

Low uranium prices have had a twofold effect on uranium supply over the last decade.

Firstly, miners have cut back on production due to the weakness in prices, reducing the primary supply of uranium. Here are some production cutbacks from major uranium mining companies:

YearCompanyProduction Cutback
2016Cameco 🇨🇦Production at Rabbit Lake Mine suspended
2017Kazatomprom 🇰🇿Output reduced by 10%
2018Kazatomprom 🇰🇿Output reduced by 20%
2018Paladin Energy 🇦🇺 Production at Langer Heinrich Mine suspended
2018Cameco 🇨🇦Production at McArthur River Mine suspended
2019Kazatomprom 🇰🇿Output reduced by 20%

Table excludes suspensions induced by COVID-19.
Sources: Cameco, WISE Uranium Project, Paladin Energy

In addition, low prices have also blocked new supplies from entering the market. Around 46% of the world’s identified uranium resources, 8 million tonnes, have an extraction cost higher than $59 per lb. However, uranium prices have hovered close to $30 per lb since 2011, making these resources uneconomic.

As a result, the supply of uranium has been tightening, and in 2020, mine production of uranium covered only 74% of global reactor requirements.

Going Nuclear: The Future of Uranium

The world is moving towards a cleaner energy future, and nuclear power could play a key role in this transition.

Nuclear power is not only carbon-free, it’s also one of the most reliable and safe sources of energy. Countries around the world are beginning to recognize these advantages, including Japan, where all 55 reactors were previously taken offline following the Fukushima accident.

With more than 54 reactors under construction and 100 reactors planned worldwide, the demand for uranium is set to grow. Unlocking new and existing supplies is critical to meeting this rising demand, and new uranium discoveries will be increasingly valuable in balancing the market.

Standard Uranium is working to discover uranium with five projects in the Athabasca Basin, Saskatchewan, Canada, home of the world’s highest-grade uranium deposits.

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Electrification

Visualizing Peru’s Silver Mining Strength

With a rich history of mining, Peru plays a vital role in supplying the world with silver for clean energy technologies and electrification.

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Peru's Silver Mining Strength

Visualizing Peru’s Silver Mining Strength

Peru’s silver mining industry is critical as the world progresses towards a clean energy transition. Silver’s use in EVs, solar energy, and mobile technologies will require ready supplies to meet demand.

Peru will be centre stage as the world’s second-largest producer of the precious metal.

This graphic sponsored by Silver X showcases Peru’s silver mining strength on the global scale, putting in perspective the country’s prolific production.

Global Silver Production by Country

Mexico, Peru, and China dominate global silver production, with these countries producing more than double the silver of any other country outside of the top three.

In terms of regional production, Central and South America provide the backbone for the world’s silver industry. With five nations in the top 10 producers, these regions delivered ~50% of the world’s 2020 silver production.

Country2020 Silver Production (in million ounces)Share of Global Silver Production
Mexico178.122.7%
Peru109.714.0%
China108.613.8%
Chile47.46.0%
Australia43.85.6%
Russia42.55.4%
Poland39.45.0%
United States31.74.0%
Bolivia29.93.8%
Argentina22.92.9%
World Total784.4100%

Along with being the top silver mining regions in the world, Central and South America silver production expects to have the strongest rebound in 2021.

While global silver production could increase by 8.2%, Central and South America’s production could rise by 12.1%.

Peru can feed this growth, with the country’s exploration investment forecast for this year expected to reach up to $300 million with over 60 projects currently in various stages of development.

The South American Powerhouse: Peru’s Silver Mining Strength

Despite its current silver production, there remains more to mine and explore. In fact, Peru holds the majority of the world’s silver reserves with 18.2%, making it the global focal point for silver exploration and future production.

CountrySilver Reserves (in tons)Share of World Silver
Peru91,00018.2%
China41,0008.2%
Mexico37,0007.4%
Chile26,0005.2%
Australia25,0005.0%
Other countries280,00056%
World total500,000100%

While 2020 and 2021 saw slowdowns in mineral production, Peru’s metallic mining subsector increased by 5.1% in August 2021 compared to the same month last year. The country’s National Institute of Statistics and Informatics also highlighted a double-digit rise in silver production of 22.7% compared to August of last year.

Satiating the World’s Silver Demand

As silver demand is forecasted to increase by 15% just in 2021, silver supply constraints are a clear roadblock for clean energy technologies and electric vehicle production. With Peru’s annual silver production forecasted to grow by more than 27% by 2024, the country is looking to solve the world’s growing silver supply crunch.

The nation’s strong credit ratings and well-established mining sector offers investors a unique opportunity to tap into the growth of Peru and its silver industry, while powering renewable energy and electric vehicle production.

As a Peru-based mineral development and exploration company, Silver X Mining is working to produce and uncover the silver deposits that will provide the world with the metal it needs for cleaner technologies.

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Electrification

Ranked: The Top 10 EV Battery Manufacturers

With an increasing interest in electric vehicles (EVs), the battery market is now a $27 billion per year business.

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The Top EV Battery Manufacturers

Ranked: The Top 10 EV Battery Manufacturers

With increasing interest in electric vehicles (EVs) from consumers, the market for lithium-ion EV batteries is now a $27 billion per year business.

According to industry experts, high demand has boosted battery manufacturers’ profits and brought heavy competition to the market. And by 2027, the market could further grow to $127 billion as consumers embrace more affordable EVs.

Asian Powerhouses of Battery Production

Besides being a manufacturing powerhouse of vehicle parts, Asia is fast becoming a hotbed for innovation in the battery sector.

No wonder, the top 10 EV battery manufacturers by market share are all headquartered in Asian countries, concentrated in China, Japan, and South Korea.

RankCompany2021 Market ShareCountry
#1CATL32.5%China 🇨🇳
#2LG Energy Solution21.5%Korea 🇰🇷
#3Panasonic14.7%Japan 🇯🇵
#4BYD6.9%China 🇨🇳
#5Samsung SDI5.4%Korea 🇰🇷
#6SK Innovation5.1%Korea 🇰🇷
#7CALB2.7%China 🇨🇳
#8AESC2.0%Japan 🇯🇵
#9Guoxuan2.0%China 🇨🇳
#10PEVE1.3%Japan 🇯🇵
n/aOther6.1%ROW

According to data from SNE Research, the top three battery makers—CATL, LG, and, Panasonic—combine for nearly 70% of the EV battery manufacturing market.

Chinese Dominance

Based in China’s coastal city of Ningde, best known for its tea plantations, Contemporary Amperex Technology Co. Limited (CATL) has risen in less than 10 years to become the biggest global battery group.

The Chinese company provides lithium iron phosphate (LFP) batteries to Tesla, Peugeot, Hyundai, Honda, BMW, Toyota, Volkswagen, and Volvo, and shares in the company gained 160% in 2020, lifting CATL’s market capitalization to almost $186 billion.

CATL counts nine people on the Forbes list of global billionaires. Its founder, Zeng Yuqun, born in a poor village in 1968 during the Chinese Cultural Revolution, is now worth almost as much as Alibaba founder Jack Ma.

China also hosts the fourth biggest battery manufacturer, Warren Buffett-backed BYD.

Competition for CATL Outside China

Outside China, CATL faces tough competition from established players LG and Panasonic, respectively second and third on our ranking.

With more than 100 years of history, Panasonic has Tesla and Toyota among its battery buyers. LG pouch cells are used in EVs from Jaguar, Audi, Porsche, Ford, and GM.

U.S. and Europe’s Plans for Battery Production

President Joe Biden’s strategy to make the United States a powerhouse in electric vehicles includes boosting domestic production of batteries. European countries are also looking to reduce decades of growing reliance on China.

As Western countries speed up, new players are expected to rise.

A host of next-generation battery technologies are already being developed by U.S. companies, including Ionic Materials, QuantumScape, Sila Nanotechnologies, Sion Power, and, Sionic Energy.

Any direction the market moves, certainly the forecast is bright for battery producers.

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