nuclear power and the international uranium market · 2012-11-21 · waste management program the...
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1
Nuclear Power and the International Uranium
Market
Dustin J. GarrowInternational Uranium (USA) Corp.
NMA/NRC Uranium Recovery WorkshopJune 27, 2006
2
Uranium Mining and Milling
U3O8
Conversion to UF6
Natural UF6
Enrichment Fuel Fabrication
UO2 Fuel Rods
Light Water Power Reactors
Producers, world-wide, sell U3O8 to utilities and traders.
55 Gal. drums = 850 lbs U3O8
14 Ton cylinders = 8,000 kg UF6
Spent Fuel
Spent Fuel Storage at Reactors
Reprocessing
Waste Management Program
The Nuclear Fuel Cycle
Low Enriched UF6
Depleted UF6
“Tails”
3
World Nuclear Capacity(May 2006)
441 Reactors
369,374 Mwe
31 CountriesAnnual Requirement - 170 million
pounds U3O8
4
Nuclear Generating Capacity(Total – 369,374 Mwe)
Japan13%
Ukraine4%
France17%
Russia6%
Germany6%
South Korea5%
Remainder20% Canada
3%
United States26%
5
Electricity GenerationNuclear Share (%) - 2005
0 10 20 30 40 50 60 70 80France
Lit huania
Slovakia
Belg ium
Ukraine
Sweden
Sout h Korea
Bulgaria
Armenia
Slovenia
Sout h Korea
Hungary
F inland
Swit zerland
Germany
Czech Rep.
Japan
UK
Spain
USA
6
Reactors Under Construction(May 2006)
27 Reactors
21,051 Mwe
11 Countries
7
Longer Term Prospects
• China• Finland• France• India• Japan• Russian Federation• South Korea• Canada (?)• United Kingdom (?)• United States (?)
8
United States• Capacity Factors
• Operating License Extensions
• Early Site Licensing Program
• Browns Ferry -1 Restart (US$1.9 billion)
• Energy Policy Act of 2005
• New Nuclear Build– Sixteen companies have expressed an interest in constructing up to 25 new
nuclear power plants (no orders formalized)
– COL applications expected 2007-2008
– Expected commercial operations beginning 2014-2015
576.9
782.0
500
600
700
800
1990 2005
Increase in U.S. Nuclear Plant Output:(1990-2005)
Equivalent to 26 new 1,000-megawatt power plants
Year
Bill
ion
kWh
10
President George W. Bush- Position on Nuclear Power -
“Our goal is to start the construction of new nuclear power plants by the end of this decade.”(February 18, 2006)
“For the sake of economic security and national security, the United States of America must aggressively move forward with the construction of nuclear power plants.”(May 24, 2006)
11
Nuclear “Phase Out” Programs
• Belgium
• Germany
• Sweden
• United Kingdom (replacement)
12
World Nuclear Capacity Forecast(World Nuclear Association - 9/05)
250
300
350
400
450
500
550
600
650
700
750
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030G
we
Lower Reference Upper
13
World Uranium Requirements(World Nuclear Association - 9/05)
125
150
175
200
225
250
275
300
325
350
375
400
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029M
illion
lbs
U3O
8
Lower Reference Upper
14
World Uranium Production and Consumption
1946-2005
0
20
40
60
80
100
120
140
160
180
200
1946
1955
1970
1985
2000
Mill
ionP
ound
s U
3O8
Production Consumption
15
Secondary Uranium Sources
• U.S.-Russian Highly Enriched Uranium Program (1994-2013)
• U.S. Department of Energy Inventory
• Re-enrichment of Depleted UF6
• Mixed Oxide (MOX) / Reprocessed U
16
U.S. - Russia Highly Enriched Uranium Program
• 500 Metric Tons of Russian HEU (>90 % U235)
• Down-Blended to Commercial Fuel Grade (4.95 % U235)
• Contains 360-400 Million Pounds U3O8
• Deliveries continue through 2013
• Status - 269 Metric Tons HEU processed (equivalent to 10,746 nuclear warheads)
• HEU-II
17
Uranium Production - 2005(Total – 108.9 million lbs U3O8)
Australia23%Niger
8%
Russia8%
Kazakhstan10%
Namibia8%
Uzbekistan6%
Others8%
Canada29%
18
World’s Largest Uranium Mines2005
0
2
4
6
8
10
12
14
16
18
20
Mill
ion
Pou
nds
McArth
ur Rive
rRan
gerOlym
pic D
amRos
sing
Priargu
insky
Rabbit L
ake
McClea
n Lak
e
Akouta Arlit
Zhielt
ye V
ody
Vaal R
iver
19
Uranium Production - 2005(Total – 108.9 million lbs U3O8)
In-Situ Leach21%
Co-Product9%
By-Product2%
Conventional68%
20
Global Uranium Production1996-2005
91 92.8 87.780.8
91.5 94.5 93.7 92.6104.7 108.9
0
10
20
30
40
50
60
70
80
90
100
110
120
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
mill
ion
poun
ds U
3O8
21
How Do Utilities Buy Uranium?
• Spot (or near-term market) represents about 10-15% of annual volume
• Vast majority of uranium needs are filled through “term” uranium purchase agreements
• So, the important market to watch is not the spot demand and supply but conditions in the long-term (or multi-year) market
22
Uranium Transactions - Spot Market1990-2005
40.1
30.0
39.4
35.032.6
41.9
19.6
22.7
11.4
24.2
14.616.7
18.2
21.8
18.2
35.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Mill
ion
lbs.
U3O
8
23
Long-Term Uranium Contracting1995 – 2005
(Source: The Ux Consulting Company)
0
50
100
150
200
250
300
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
mill
ion
poun
ds U
3O8
Non-US US
24
U.S. Nuclear UtilitiesUranium Requirements vs. Contracted Supply
(December 31, 2005)
0
10
20
30
40
50
60
70
Mill
ion
lbs
U3O
8
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Uranium Requirements Contracted Supply
25
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02
US
$ pe
r lb
U3O
8
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
Average U3O8 Spot Price Nuexco Long-Term U3O8
Uranium Price Trend1996 - 2002
26
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
Jan-03 Jan-04 Jan-05 Jan-06
US
$/lb
U3O
8
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
Average U3O8 Spot Price Long-Term U3O8 Price
Uranium Price Trend2003 - Present
27
Uranium Market Balance2006-2015
0
200
400
600
800
1000
1200
1400
1600
1800
2000
milli
on p
ound
s U
3O8
Requirements Primary Production (existing/development) Secondary Supplies Needed
28
Conclusions / Observations
• Nuclear power will continue to expand globally• New uranium production is needed in order to meet
requirements • Uranium market continues to adjust to changes in
fundamental demand and supply forces• Resultant price effects underscore continuing
imbalance especially in the term market• Uranium market instability can be expected for the
foreseeable future