The future for nuclear power, and therefore uranium, is looking brighter. To paraphrase a line sung by Gene Autry (about Rudolph the red-nosed reindeer), you might even say it’s glowing.

The demand for electric power in the world is expected to double between now and about 2035. The proportion of total power in Canada that is nuclear is almost exactly the same as for the world at large, one-sixth.

First, let’s look at some facts about the world nuclear industry. There are over four hundred nuclear reactors operating in some thirty countries. France and Belgium are two prominent nations that get more than half of their electricity needs from nuclear plants. (The French firm Areva is always in the news.)

The net increase in the number of reactors worldwide is expected to be close to 20% by 2016. Most of the new reactors will be built in China, Russia and India.

The number of new mines coming on-stream is quite limited. Because uranium is such a hazardous material, it takes 10 years for a new mine to go through the regulatory process and reach production.

Highly enhanced uranium (HEU) can also be obtained from decommissioned (U.S. and Russian) nuclear warheads. However, the stockpile of these is gradually being diminished.

The limited increases to production capacity have led to a marked run-up in uranium prices. Between 2001 and 2007, they climbed from slightly less than $10 US per pound to a maximum of $136 US. They have now eased back under $100 US.

The foregoing sets the background. In my next two related blog entries, I’ll talk more specifically about uranium production in Canada and the United States. (Canada’s Cameco is the largest uranium miner in the world.)

Remember that there are two construction aspects to nuclear power generation: (1) development of uranium mines; and (2) the nuclear reactors themselves, costing billions of dollars.

Much of the information for this blog entry (over three days) comes from several articles in two magazines, Resource World (February 2008) and Bloomberg Markets (March 2008).

Alex Carrick

Find Canadian construction-related economic articles in Canadian Construction Market News and in the Economic Outlook section of Daily Commercial News.

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