The revival of uranium has encountered a minor obstacle as Kazatomprom, the world’s leading yellowcake producer, faces a production issue over the next two years.
The development is poised to see uranium prices, already at their highest in 16 years, rally once more.
Kazatomprom recently issued a warning of a probable shortcoming in its production goals through 2025 due to construction setbacks and difficulties associated with the accessibility of sulfuric acid.
In the extraction process, sulfuric acid is vital to facilitate the leaching and recovery of uranium from raw ore.
The Kazakhstan-based mining firm is the top uranium miner globally, representing over 20% of the world’s output. The company’s home country is also the source of 43% of the world’s uranium supply, the biggest part of the international market for the heavy metal.
Kazatomprom’s announcement comes amid other major uranium producers dealing with their own production challenges.
Canada’s Cameco has cautioned of a decrease in output, while France’s Orano has closed its operation in Niger.
Portfolio manager at investment and advisory firm Tribeca Guy Keller said they are coming from ten years of undersupply, and the deficit will persist due to the ongoing execution of the largest reactor construction program in decades.
Uranium, a critical material in nuclear power creation, is witnessing increased demand as governments transition from carbon-emitting fuels and cut their dependency on Russian oil and gas.
Sprott Asset Management CEO John Ciampaglia mentioned further worries on supply as Russia may have a retaliatory response to proposed US legislation aimed at prohibiting the import of Russian-enriched uranium.
The House approved the bill in December, reinforcing their actions to impede Russia’s efforts to fight Ukraine. The legislation still requires the Senate’s approval before it can move to President Joe Biden for law signing.
Ranked sixth globally in uranium production, Russia is also the yellowcake’s leading enricher, a process that simplifies the sourcing of nuclear fuel from uranium ores.
Ciampaglia stated that those factors are creating a more significant anticipated supply shortfall in the coming years and possible disruptions to the nuclear fuel supply chain.
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