By: The northern miner

Western countries will have to look at developing more domestic or allied sources of uranium if rising demand in the next 15 years continues to exceed supply, a panel at PDAC heard.

Increasing demand for nuclear reactor builds in the United States – and other demand sources – could lift utility needs more than 12-fold to 103 million lb. of uranium by 2031 from 8 million lb. in 2027, UxC Executive Vice-President Nicolas Carter said Tuesday on the Reviving the Uranium Life Cycle panel.

“Filling that supply gap will be quite challenging going forward,” Carter said as he outlined several headwinds expected to face supply by 2040.

Global uranium scramble

The outlook presented by the Roswell, Ga.-based uranium market research and analysis firm, comes as global demand for the heavy metal continues to rise. After Kazakhstan’s Kazatomprom (LSE: KAP), the world’s top producer of uranium, announced plans last month to sell a large amount of nuclear metal output to India, Canadian producer Cameco (TSX: CCO; NYSE: CCJ) signed a C$2.6 billion supply deal with the Asian country this week.

Demand is due to begin outpacing global supply by 2030, with unfilled utility needs projected to hit 6.1-million lb. by 2031. That shortfall should widen to 118.2 million lb. by 2040, according to data presented by Carter.

The supply-demand gap is expected to widen by 2040. Credit: Blair McBride

“There’s a pretty big supply gap certainly in the mid 2030s,” he said. “What’s going to fill that gap?”

To be sure, some new mines anticipated to begin production in the coming years – such as Denison Mines (TSX: DML) Phoenix project in Saskatchewan and Bannerman Energy’s (ASX:BMN; US-OTC:BNNLF) Etango project in Namibia – could bring more supply onto the market, Carter said.

Geopolitical headwinds

Supply still faces some significant risks, especially geopolitical, Carter said, citing the 2024 seizure of Orano’s Somaïr mine by Niger military government and uncertainty over Orano’s Zuuvch Ovoo project in Mongolia.

Zuuvch Ovoo, which the French miner says could produce 2,500 tonnes of uranium annually over a 30-year life, “looks great on paper,” Carter said. “It could be a really good project for them. But they’ve got the political risk there of Mongolia, a lot of instability within that country.”

Kazakhstan’s new subsoil use code amendments, which could tighten control of foreign interests in uranium exploration and production, pose another risk for global output.

“It’s really about developing projects in more friendly nations, whether it be Canada or the U.S.,” he said in response to questions from The Northern Miner. “Perhaps more development in some of the South American countries. I think Namibia is still a big bright spot in terms of development.”