By: Irma Venter
25th July 2008
Global uranium exploration and mine development expenditure in 2006 numbered about $774-million, which is an increase of 254% compared with 2004 figures, especially as the uranium market kept on strengthening during this period. Exploration and development expenditure is expected to have remained strong in 2007 – despite a soften- ing in the uranium spot price – amounting to about $718-million, with the final figures for 2007 not yet released.
This is according to the Organisation for Economic Cooperation and Development Nuclear Energy Agency and the International Atomic Energy Agency’s newest so-called Red Book, covering global uranium resources, production and demand, published last month.
The biennial Red Book was first published in 1965, and contains data from 40 countries.
This, the twenty-second publication, notes that most major uranium producing countries have reported significantly increased expenditure over the last few years.
This is, perhaps, best exemplified by Australia, where exploration and development expenditure in 2002 amounted to little over $3-million increasing to almost $10-million by 2004, more than $30-million in 2005, and $60-million in 2006.
The majority of global exploration activities remain concentrated in areas with potential for hosting unconformity-related and in situ leaching-amenable sandstone deposits, primarily in close proximity to known resources and existing production facilities.
However, high prices for uranium over the last few years have stimulated grassroots exploration, as well as increased exploration in regions known to have good potential based on past work.
About 75% of the exploration and development expenditure in 2006 was devoted to domestic
Nondomestic exploration and development expenditure, although reported by only Australia, Canada, France and Switzerland, rose to more than $214-million in 2006, which is a more than 200% increase from the non-domestic expenditure reported in 2004.
The Red Book also notes that there is enough uranium known to exist to fuel the world’s fleet of nuclear reactors at current consumption rates for at least a century.
The publication estimates the identified amount of conventional uranium resources which can be mined for less than $130/kg to be about 5,5-million tons, up from the 4,7-million tons reported in 2005. (At the end of May 2008, the spot price for uranium was $156/kg.)
Undiscovered resources – in other words, uranium deposits that can be expected to be found, based on the geological characteristics of already discovered resources – have also increased to 10,5-million tons.
This is an increase of 0,5-million tons according to the previous edition of the report, in 2005.
These increases are due to both new discoveries and re-evaluations of known resources, encouraged by higher prices.
However, notes the Red Book, total world uranium resources are dynamic and related to commodity prices.
The uranium industry has reacted to recent increases in the price of uranium by launching major new investments in exploration, which can be expected to lead to further additions to the uranium resource base.
At the end of 2006, world uranium production (39 603 t) provided about 60% of world reactor requirements (66 500 t) for the 435 commercial nuclear reactors in operation.
The gap between production and reactor requirements was made up by secondary sources drawn from government and commercial inventories (such as the dismantling of more than 12 000 nuclear warheads and the re-enrichment of uranium tails).
The Red Book notes that most secondary resources are now in decline, and that the gap will increasingly need to be closed by new production.
“Given the long lead time typically required to bring new resources into production, uranium supply shortfalls could develop if production facilities are not implemented in a timely manner.”
Edited by: Martin Zhuwakinyu