A Uranium Crunch Looms Over Nuclear’s Parade

Uranium doesn’t grow on trees, which is generally a good thing but its scarcity has been murder on the suddenly ascendant nuclear industry.

The sector has been soaring on an atomic tailwind thanks to the energy demands of AI-hungry tech companies, but dwindling uranium supplies could gum things up, the Financial Times reported on Monday. On top of a diminishing pile of uranium, there’s also the awkward geopolitical fact that its top producer, Kazakhstan, is chummier with neighbors Russia and China than it is with western countries eager to throw up new nuclear power plants — or reactivate old ones.

Supply Chain Reaction

The world’s uranium supply entered a surplus phase following the Fukushima nuclear accident in 2011, when world powers got an uncomfortable reminder of what’s at stake when a nuclear reactor malfunctions. Pre-Fukushima, the price of uranium peaked at $136 per pound, per Nikkei Asia, but after the accident, the bottom fell out of the market and that price point plummeted to between $20 and $40. In 2024, the rush for nuclear power drove the price of uranium to post-Fukushima highs: It hit $91 per pound in January last year.

As supply tightens and with demand still high, nuclear costs can’t help but rise. It’s nothing the industry hasn’t wrestled with before, but geopolitics cast a long shadow over the uranium supply chain:

• “Russian and Chinese players have been very keen to secure access to resources in central Asia and Africa, creating a very aggressive competitive environment,” Benjamin Godwin, partner at Prism Strategic Intelligence, told the FT.
• Cory Kos, vice president of investor relations at Canadian uranium producer Cameco, agreed that the company was seeing “more flows of material into China,” adding: “As an industry, we’re living off borrowed time […]  inventory that’s running out has kept the supply chain going.”

Oh, Canada: Kazakhstan wasn’t always the world’s biggest uranium producer. Until 2008, Canada held the world’s uranium crown, and according to another FT report, it’s trying to reclaim it. It’s now the world’s second-largest producer, and Canadian mining companies are racing to set up new mines to capture the nuclear zeitgeist. As Canadian energy and natural resources minister Jonathan Wilkinson told the FT, “Not only does Canada mine enough uranium to fuel our domestic reactors, but we are also the only country in the G7 that can supply uranium to fuel our allies’ reactors.” Wilkinson is probably hoping uranium doesn’t end up on any new lists of tariffs Trump is drawing up.