Uranium (chemical element U, better known as U3O8) in its pure form is a silvery white metal of very high density -- even denser, than lead. Uranium can take many chemical forms, but in nature it is generally found as an oxide (in combination with oxygen). Triuranium octoxide (U3O8) is the most stable form of uranium oxide and is the form most commonly found in nature.Uranium decays slowly by emitting an alpha particle. The half-life of uranium-238 is about 4.47 billion years and that of uranium-235 is 704 million years, making them useful in dating the age of the Earth.World uranium production is dominated by Kazakhstan, Canada and Australia which, together, produce about 60% of annual mine supply. These countries are followed by Niger, Russia and Namibia. These leading producers account for approximately 84% of worldwide mine production. Canada, Australia and Kazakhstan are estimated to account for over half of the world's resources of uranium, which are estimated to total approximately 4.74 million tonnes. Australia has approximately 30% of World resources, Kazakhstan 17% and Canada 12%.

Many industrialized nations are heavily dependent on nuclear power generation, with nuclear electricity representing a major component in such countries as the United States (20%), Hungary (36%), Sweden (46%), and particularly France (78%) and Lithuania (80%). Worldwide, there are 435 nuclear power reactors operating in 31 countries with total installed capacity of 370,000 MWe. The scale of the world's nuclear industry is considerable and growing. Japan used to be one of the biggest nuclear electricity producers (34%), but since the Fukushima disaster in 2011 all nuclear reactors have been shut down and are coming online slowly ever since. There is talk of restarting utilities in Germany as well, but also lifting the moratorium on uranium mining in Sweden.

Uranium deposits are found all over the world. The largest deposits of uranium are found in Australia, Kazakhstan and Canada. High-grade deposits (>20% U3O8) are only found in Canada, in the famous Athabasca Basin (taken from a early presentation of Fission Uranium):

Uranium ore can be mined in one of three ways depending on the characteristics of the deposit and the value of the uranium (as the price of uranium rises, formerly uneconomic deposits may become economic). Uranium deposits close to the surface can be recovered using the open pit mining method, while underground mining methods are used for deep deposits. Given the right hydrology and geology, the ore may be mined by in situ recovery (ISR) leaching; a process that dissolves the uranium by circulating oxygenated solutions through the uranium-bearing rock formations. In 2014 worldwide production of uranium came from underground (41%), open pit (24%) and ISR mines (26%). As mentioned earlier, uranium frequently occurs as a trace element in other mineral deposits such as copper, gold or phosphates. Approximately 9% of the 2014 worldwide uranium production originated from such by-product recovery operations.

When uranium ore is present within 100-200m of the surface, it is typically extracted with open pit mining techniques.
When an ore body is located more than 100 metres below the surface, underground mining methods are necessary as the costs to remove the overlying rocks (overburden) would be prohibitive. For example, Cameco's McArthur River ore body is located more than 500 metres below the surface and is mined using an underground mining method.
In certain sandstone deposits geological and hydrological conditions allow uranium to be dissolved directly by pumping an oxygenated lixiviant underground where it dissolves the uranium, pumping it back to the surface, extracting the dissolved uranium in ion exchange columns and recycling the barren solution back underground to repeat the process. With this in situ recovery (ISR) process there is limited surface environmental disturbance. Leaching is another word for dissolving and 'in situ' means in the original position or place. A majority of the uranium produced in the USA, Kazakhstan and in Western Australia is produced by this environmentally benign and comparatively inexpensive technology.

In 1993 the USA and Russia entered into the so-called "Megatons-to-Megawatts" agreement whereby each country would dismantle a significant fraction of its nuclear weapons and recycle the contained Highly Enriched Uranium (approximately 90% 235U) to Low Enriched Uranium (4-5% 235U) for use as fuel in nuclear power reactors. This program has come to a close in Q4, 2013, however not sparking any worries on demand and consequential uptick in U-spot prices whatsoever. The current state of the uranium spot- and long term prices can be found on the Cameco site.

Supply and demand: A major factor behind the bullish outlook is that the demand for uranium in Western markets (excluding Russia)—currently at approximately 200 million pounds—is about 40 million pounds greater than the radioactive metal’s supply. Furthermore, market analysts project an average supply deficit of 35 million pounds per year over the next decade. That projection considers existing production, secondary supply, and returning mining production.

Ramping up production: A number of mining operations are ramping up their uranium production, including Boss Energy’s Honeymoon (in South Australia), Paladin Energy’s Langer Heinrich (in Namibia), and Cameco’s McArthur River project (in Saskatchewan, Canada). The latter company plans to increase its uranium production to 22 million pounds this year. However, to meet the market’s base demand out to 2040, much more production will be required from additional mining operations. Unfortunately, a new uranium mine can take as long as 15 years to come on line from discovery to first production, so meeting the demand will be difficult. Therefore, the “underlying market fundamentals are still ratcheting tighter,” according to Leigh Goehring, managing partner with natural resource investors Goehring & Rozencwajg Associates.

SPUT: Another factor behind the market is the Sprott Physical Uranium Trust (SPUT), which began buying uranium in 2021 to take the metal out of circulation and impound it for the long term. As of early 2024, SPUT had impounded more than 63 million pounds of uranium. Some people in the industry have proposed adding a “redemption feature” to SPUT, so that as much as 5 percent of the trust’s uranium inventory might be made available for sale once or twice a year—a proposal has generated some controversy.

Nuclear resurgence: quoted John Ciampaglia of Sprott Asset Management, which operates SPUT, as attributing part of the bull market to a nuclear “resurgence given the growing momentum. Who would have thought that in just two years, public sentiment and government support would have shifted this strongly?” He added, “The industry will require significant capital investments to meet its ambitious expansion plans.”

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