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on commodities

With the rising price of oil and natural gas this year and supplies being embargoed from Russia, talk of nuclear power has increased substantially. Today we look at the commodity powering nuclear plants – uranium.


Uranium occurs naturally in low concentrations in soil, rock and water, and is commercially extracted from uranium-bearing minerals such as uraninite. Uranium mined from the earth is stored, handled, and sold as uranium oxide concentrate (U3O8), which is known as yellowcake, containing roughly 80 per cent uranium.

Uranium is enriched into U235 concentrations so it can be used as fuel. Enriched uranium between 3 per cent and 5 per cent U235 is referred to as reactor-grade uranium and is used in nuclear power plants, whereas highly enriched uranium (HEU), which contains greater than 20 per cent U235, is used in nuclear weapons, nuclear-powered ships and submarines, and research reactors.


The primary driver of uranium demand is the capacity of nuclear reactors to generate electricity, therefore the lion’s share of uranium is traded using long-term contracts between uranium producers and utility companies. Most of the rest is sold on the spot market. One can also trade uranium futures on the New York Mercantile Exchange (Nymex).

Supply and demand

There are 440 reactors worldwide that require 74,000 tonnes of uranium oxide concentrate each year. Mines in 2021 supplied 77 per cent of the utilities’ annual requirements with the difference being made up from stockpiles around the world.

Canada produced, on average, about 10,000 tonnes of uranium each year over the past decade, of which 75 per cent was exported and the rest consumed domestically at Candu reactors in Ontario and New Brunswick. Globally, in 2021, Kazakhstan produced the largest share of uranium (45 per cent of world supply), followed by Namibia (12 per cent) and Canada (10 per cent). Recently, Canada’s production levels have fallen to the 5,000-tonne level owing to mine downtime.

To make up the projected shortfall, some capacity will come back online from idled mines such as the Cameco Corp.’s McArthur River/Key Lake restart in northern Saskatchewan that is projected to ramp up to 10,000 tonnes a year in 2024.

There are also 20 mines globally either under development, planned or in the prospective stage with a total capacity of 25,000 tonnes each year.

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The World Nuclear Association’s Nuclear Fuel Report shows a projected 27-per-cent increase in uranium demand from 2021 to 2030, and a 38-per-cent increase between 2031 and 2040. Among the world’s largest economies, Japan ordered the development of new nuclear reactors and approved up to 17 reactors to be reactivated. The move signals a historical pivot as Japan regains confidence in nuclear energy after the Fukushima power-plant meltdown in 2011.


The war in Ukraine has changed the global perspective on Russian oil and natural gas; we can expect demand for other energy sources will increase as an offset. Coal use is expected to rise in the short term as a stopgap measure but over the longer term we see demand for commodities such as uranium increasing substantially.

Brian Donovan, CBV, is the president of StockCalc, a Canadian fintech based in Miramichi, N.B.

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