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Uranium & nuclear forecasts


World uranium consumption is projected to grow at an average annual rate of 4.8 per cent from 2015 and to total 97 900 tonnes of U3O8 in 2020. This growth will come primarily from emerging, highly populated economies whose energy policies are embracing nuclear power to provide low carbon emitting supplies of baseload electricity that can support their growing industrial base.”
 

Office of the Chief Economist, Resources and Energy Quarterly, September Quarter 2015

  • Nuclear power capacity will continue to grow
  • The fastest growth will be in Asia

  • Population growth and climate change policies will be the key drivers of growth

  • Australian production and export volumes and values are expected to increase substantially

  • IAEA’s forecasts have global nuclear electricity generation rising between 24 per cent and 222 per cent from 2014 to 2050.

  • The IEA projects nuclear power generation increasing by almost 86 per cent in the New Policies Scenario (Central case), from 2478 TWh in 2013 to 4606 TWh in 2040.
    OECD NEA sees uranium demand rising between 22 and 106 per cent from 2013 to 2035.

  • The Office of the Chief Economist forecasts global uranium consumption and prices to rise through to 2020.

INTERNATIONAL ATOMIC ENERGY AGENCY

SOURCE: ENERGY, ELECTRICITY AND NUCLEAR POWER ESTIMATES FOR THE PERIOD UP TO 2050, Vienna 2015, 2015 Edition

INTERNATIONAL ENERGY AGENCY

SOURCE: INTERNATIONAL ENERGY AGENCY, WORLD ENERGY OUTLOOK 2015

OECD NUCLEAR ENERGY AGENCY

SOURCE: URANIUM 2014: RESOURCES, PRODUCTION AND DEMAND, OECD 2014

The OECD’s Nuclear Energy Agency forecasts installed nuclear generating capacity rising from 372 GW in 2013 to between 399 GW and 678 GW in 2035.  This is a rise of between 7 per cent (low case) and 82 per cent (high case).

Accordingly, it sees uranium requirements increasing from 59,270 tonnes Uranium in 2013 to between 72,205 tonnes Uranium and 122,110 tonnes Uranium in 2035. This is a rise of between 22 per cent (low case) and 106 per cent (high case).

OFFICE OF THE CHIEF ECONOMIST

SOURCE: Australian Government, Office of the Chief Economist, Resources and Energy Quarterly, September Quarter 2015

Prices

The re-start of the Sendai reactor in August has ended Japan’s nuclear power hiatus but had limited impact on uranium prices. Instead, the substantial growth in nuclear power in emerging economies remains the defining feature of uranium markets.

Consumption

Over the outlook period rapid growth in the number of operating nuclear power reactors is expected to underpin substantial increases in demand for uranium. As a result, world uranium consumption is projected to grow at an average annual rate of 4.8 per cent from 2015 and to total 97 900 tonnes of U3O8 in 2020.

Production

In the medium term, increased uranium demand stemming from a rise in the number of operating reactors around the world is expected to eventually result in new mines being commissioned. A number of large mines are at various stages of development and are well positioned to supply the market in coming years when uranium prices recover sufficiently. World uranium production is projected to increase to 87 900 tonnes of U3O8, 29 per cent higher than 2015. Most of this growth in production is expected to be sourced from brownfield expansions of lower cost mines and mines already under construction ramping up to full production. New mines are likely to be commissioned towards 2020 in response to demand-driven uranium price increases, but these are not expected to produce substantial quantities in the next five years.

Australian production

Despite the upswing in uranium prices over the past twelve months, Australia’s uranium exploration expenditure decreased 7.5 per cent in 2014-15 and totalled $40.6 million. This decrease was principally due to a 56 per cent drop in exploration expenditure in Queensland following changes in state government policies and regulations on uranium mining. This more than offset a 17 per cent increase in exploration expenditure in Western Australia.

In 2014-15 Australia is estimated to have produced 6196 tonnes of U3O8, up 12 per cent from 2013-14. This increase in production is the result of the Four Mile mine in South Australia ramping up after commencing production in 2014 and the Ranger facility returning to capacity after production was disrupted in the first six months of 2014. Production is forecast to remain around the same level in 2015-16. In the short term, Australia’s uranium production is forecast to decline as the stockpile of ore at ERA’s Ranger site is run down. ERA’s decision not to proceed with the Ranger 3 Deeps project will also not result in the mine re-commencing production in the medium term. Nevertheless, there are still several prospective uranium mines under development in Australia, including Toro Energy’s Wiluna and Vimy Resources’ Mulga Rock projects in Western Australia, that are expected to support growth in uranium production. Australia’s uranium production is projected to increase to around 8500 tonnes of U3O8 in 2019-20, around 38 per cent higher than 2015-16.

Australia exported around 5515 tonnes of U3O8 in 2014-15, 18 per cent lower than 2013-14 when previously accumulated uranium inventories were shipped. Export values decreased 14 per cent to $532 million as lower volumes offset the effects of higher prices and a more favourable exchange rate. In 2015-16, export volumes are forecast to increase 9 per cent to 6024 tonnes. Export values are forecast to rise 37 per cent to $728 million, due principally to forecast higher volumes, prices and a lower Australian dollar exchange rate.

In 2019-20, export volumes are project to increase in line with rising production and total around 8500 tonnes. Export revenue is projected to increase to $960 million (in 2015-16 dollars), underpinned by projected higher prices.

Uranium Outlook