If you want a better understanding of the forces at work that are helping drive the mining industry's interest in the rich uranium deposits of northern Arizona, read a recent investment analysis posted on Mineweb.com. [Right, uranium ore. Credit, USGS]
"...nuclear warheads that were once on Russian ICBMs aimed at American cities are now providing 50% of the electricity produced by America's nuclear power plants." And the supplies of this uranium are running out. Here are some excerpts:
When the USSR collapsed Russia inherited over a thousand tons of weapons-grade uranium and a massive nuclear refining and fabricating infrastructure - 40% of world total.During the twenty year Megatons to Megawatts Program Russia will have converted 500 tonnes of highly enriched uranium (HEU - uranium 235 enriched to 90 percent) from dismantled Russian nuclear weapons into low enriched uranium (LEU - less than 5 percent uranium 235) for nuclear fuel and sell it to the US.
The Megatons to Megawatts Program, according to the US Enrichment Corp (USEC, the government created entity to buy and transport the uranium) was supplying roughly 50% of the US's LEU demand. Mining accounted for 8% with the rest coming from other sources (rapidly depleting utility and government stockpiles).
The world's uranium miners currently produce 40 million pounds less than the world's nuclear power plants need - this figure doesn't include the [42+] power plants under construction or the hundreds in planning stages.
RBC Capital Markets believes there is not enough uranium production from current or planned mines to; satisfy current reactor needs, meet new reactor start up initial core requirements (3x normal load for startup), and to build inventories for new reactors. RBC estimates there will be a global uranium shortfall of over 70 million pounds by 2020 and says that the uranium market will require substantial new sources of uranium to fuel the projected growth in the global nuclear reactor fleet.