World Nuclear Association warns of uranium shortage as leading producers report declines

Demand for nuclear fuel is rising alongside the expansion of nuclear power. According to projected scenarios, primary uranium sources will become insufficient. Accelerated investment in mining, conversion and enrichment facilities is essential. The world’s two largest producers have reported expected production declines.

The World Nuclear Association (WNA) publishes a report on uranium resources and demand for nuclear fuel every two years. Since the previous edition, interest in nuclear energy and reactor construction has increased, which is reflected in projections for expected consumption. China and India in particular have ambitious plans for substantial additions.

Growing demand for small modular reactors (SMRs) and the extension of operating lifetimes for existing reactors are also contributing to the increase in projected installed capacity.

Geopolitical factors have an equally significant impact. The continuing Russia-Ukraine conflict is affecting global nuclear fuel supplies. This is leading some countries and energy companies to seek to strengthen supply security. They are therefore looking for alternative sources or developing their own capacities within the supply chain.

Development scenarios through 2040

By the end of 2024, according to the WNA, the total installed capacity of all operational nuclear power plants had reached 398 gigawatts electric (GWe). Estimated consumption stands at 67,500 tonnes of uranium (tU) per year. Around 100 reactors that are under construction are expected to add approximately 100 GWe.

This year’s report, entitled Global demand and supply availability scenarios 2025–2040, works with three projected scenarios.

World’s largest uranium miner plans to launch nuclear fuel production as well.

Under the Reference scenario, the installed capacity of all nuclear power plants will reach 746 GWe by 2040, almost double the current level. In this scenario, the calculation is based on stated plans by governments and energy companies, with annual consumption exceeding 150,000 tU. Compared with the previous edition, the installed-capacity projection differs by 60 GWe. It assumes a moderate pace of SMR deployment this decade, accelerating substantially towards the end of the projection period. By 2040, SMRs are expected to account for 7% of global installed capacity.

The Upper scenario outlines a variant with more favourable conditions for nuclear power development. It is also based on recognition that nuclear energy plays an indispensable role in achieving climate neutrality, which a number of countries have pledged to achieve. It includes an intensive pace of SMR deployment already this decade, accelerating markedly later on, with SMRs accounting for 11% of total installed capacity. It therefore envisages capacity rising to 966 GWe, 35 GWe more than in the 2023 report, with annual consumption of 204,000 tU.

Assuming delays in implementing the planned expansion, as envisaged by the Lower scenario, capacity is estimated to rise to 582 GWe and uranium consumption to 107,000 tU. In this case, the estimate has increased by as much as 96 GWe compared with 2023. Regarding SMR deployment, it assumes a smaller scale and slower pace by the end of the projection period than the preceding variants. They are therefore expected to account for only 2% of total installed capacity.

Shortage of primary uranium sources

In all three cases, estimated annual uranium consumption has increased by 20,000 tonnes compared with forecasts from two years ago. According to the WNA report, most uranium needed to operate nuclear reactors is currently supplied from primary sources, meaning newly mined and subsequently processed uranium.

Secondary sources, which come from existing inventories and reprocessed material, have so far accounted for an average of 15% of global demand. The WNA now includes, for example, inventories remaining after the Fukushima nuclear accident in Japan. The reason is the partial restart of the country’s nuclear fleet.

"We need new supply just to more or less stay where we are, let alone meet growing demand. And there is a significant gap between what we call identified sources of supply and sources that have not yet been announced or identified with any degree of confidence," ConverDyn President and CEO Malcolm Critchley assessed the situation, as reported by World Nuclear News.

As co-chair of the working group responsible for preparing the report, he believes that although new mining capacity needs to be brought online as quickly as possible, experience shows that the construction process is tending to become longer rather than shorter.

The report also assumes that the most productive uranium deposits will be depleted during the 2030s. This year, production from existing mines is expected to cover 91% of uranium demand, but this will change in all projected scenarios. Under the Reference scenario, it will fall to 40% in 10 years; in 15 years, it will drop to as little as 16% in the Upper scenario and to 26% in the Lower scenario.

It currently takes 10 to 20 years from the initial discovery of a uranium resource to reach the production stage. Governments and energy companies must therefore make key investment decisions as soon as possible. In recent years, the mining industry has seen a sharp rise in mining-cost inflation. Although global uranium resources are sufficient, extracting them in a timely and efficient manner to keep pace with growing demand represents a significant challenge.

Conversion and enrichment capacity needs to expand

Unlike in the WNA’s 2023 nuclear fuel report, there are no unused conversion or enrichment plants. Market demand has resulted in all facilities operating at full capacity.

Inventories that previously helped bridge the gap between primary supply and demand have shrunk significantly. As a result, they now represent only a limited buffer for covering conversion requirements. Even under the Reference scenario, current conversion capacity is insufficient to fully meet demand, and this imbalance will deepen further by 2040. Relevant players must therefore invest in building new conversion facilities. They must also expand existing ones and keep them operational to ensure supply security over the long term.

Overall, the WNA report concludes that while global enrichment capacity is currently considered technically sufficient, regional imbalances are raising concerns. These relate particularly to supply security and geopolitical dependence. While global demand will grow by approximately 17% by 2028, available capacity will expand by only 7% over the same period.

Under the Reference scenario, additional enrichment capacity will not become necessary until the second half of the 2030s. By contrast, the Upper scenario requires greater enrichment capacity before the end of this decade.

Accelerated development of new projects will be needed this decade to avoid potential future supply disruptions.

Kazatomprom and Cameco report declines

Two weeks before the WNA report was officially presented, Kazatomprom published its financial results for the first half of this year and its production strategy for the following year. Crucially in the context of the report under discussion, it expects to cut uranium production by around 10% from the originally planned almost 33,000 tU.

"Despite volatility in the uranium spot market and broader capital markets, partly driven by uncertainty caused by tariff wars, the long-term uranium price remained stable at USD 80 per pound, demonstrating that the fundamentals remain strong. However, the company does not consider current market developments sufficient to return to the original 100% level,"said Kazatomprom CEO Meirzhan Yussupov.

The company, majority-owned by the Kazakh state, is the world’s largest uranium producer. In 2022, it accounted for 23% of total uranium production.

Kazakhstan selects Rosatom to supply its first nuclear power plant.

Cameco ranks second, with a 12% share of global production. In August, it announced a planned reduction at one of its Canadian operations. In a press release, it said the reason was delays in expanding operations into new mining areas. At McArthur River/Key Lake, in which France’s Orano also has a stake, it expects to mine only 14 or 15 million pounds of uranium oxide (U3O8) this year.

According to World Nuclear News, this volume amounts to 5,385 to 5,770 tU. The forecast had been 18 million pounds of U3O8, equivalent to almost 7,000 tU. The company says other operations could offset the shortfall by up to 1 million pounds of U3O8. Despite this, the reduction at the operation would amount to 12 - 18%.