Uranium Hits Highest Price Since 2007
"China to Trigger Resource Securing Competition"
Uranium prices have reached their highest level in 15 years. There are warnings that Western energy supply chains could be threatened as China engages in a global scramble to secure uranium.
On the 10th (local time), Andre Liebenberg, CEO of Yellow Cake, a uranium investment company in London, told the British daily Financial Times (FT) that China is buying uranium on the market and entering into long-term contracts with uranium mines. He pointed out that the West is falling behind in securing uranium.
He said, "China will try to lock down any minerals they need," adding, "China's efforts will trigger a resource acquisition race, which will cause difficulties for Western power companies' supply capabilities."
China's Goal of 'Self-Sufficiency in Nuclear Fuel'
China is the world's second-largest nuclear power country. Currently, about half of the reactors under construction worldwide are in China. China has set a strategy to achieve self-sufficiency in nuclear fuel by sourcing one-third of its uranium demand domestically, one-third through overseas mine investments, and the remaining one-third by purchasing on the market.
Accordingly, China National Uranium Corporation (CNUC) and subsidiaries of China General Nuclear Power Group have acquired uranium mines in Niger, Namibia, and Kazakhstan. CNUC is constructing a storage facility aimed at becoming a uranium trading hub in the Xinjiang region adjacent to Kazakhstan.
CEO Liebenberg said, "The Chinese are traveling everywhere looking for new supplies," and added, "China will need more uranium to achieve its nuclear goals in the 2020s."
"Uranium Prices Could Exceed $100 per Pound"
Additionally, following last year's surge in oil prices, governments worldwide are promoting the construction of new reactors and extending the lifespan of existing nuclear power plants, further increasing uranium demand.
At the 28th United Nations Climate Change Conference of the Parties (COP28) held recently in Dubai, United Arab Emirates (UAE), 22 countries including the United States, France, Japan, South Korea, and the United Kingdom declared cooperation to triple global nuclear energy generation capacity by 2050 compared to 2020.
As a result, uranium recently traded at $81 per pound (approximately 0.45 kg), marking the highest price since 2007. Uranium prices have risen by 70% so far this year.
Uranium prices are expected to continue rising. CEO Liebenberg forecasted that uranium prices could exceed $100 per pound (approximately 132,000 KRW) next year.
Yellow Cake's stock price has also surged 54% this year, with the company's net asset value soaring from $1 billion (about 1.3 trillion KRW) in March to $1.8 billion (about 2.4 trillion KRW) recently.
However, concerns are growing that Western energy companies will face increased difficulties in this situation. Most Western energy companies rely on Russia for supply, which holds about 50% of the world's uranium reserves. Since Russia's invasion of Ukraine, it has weaponized energy in response to Western sanctions, and the possibility of Russia cutting off uranium supplies cannot be ruled out.
CEO Liebenberg said, "If Russia decides to cut off uranium supplies, Western power companies could face chaos for the next five years until they establish independent supply chains from Russia."
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