Nuclear fuel prices are rising as sanctions imposed following Russia’s covert operation in Ukraine have created bottlenecks in the uranium supply chain, the Financial Times reports.
It should be noted that the demand for uranium was driven by the revival of nuclear energy, but Russia plays a major role in the multi-stage process of converting mined uranium into fuel for a nuclear reactor and so far there is no one to replace it.
Since the beginning of 2022, prices for nuclear reactor fuel have risen much faster than those for raw uranium, which indicates the problems that have arisen in the West due to the introduction of sanctions against Russia following the start of SVO in Ukraine, the publication writes.
According to UxC, since the beginning of 2022, the cost of enriched uranium has more than tripled to $176 per unit of separation work. Over the same period, the price of uranium hexafluoride quadrupled to $68 per kg. According to analysts, this suggests that reprocessing is a major bottleneck in the nuclear fuel supply chain. The price of uranium ore has only doubled.
“Conversion and enrichment prices reflect a much larger reduction in supply due to the Russian-Ukrainian war and other factors.” — said the executive director of UxC Jonathan Hinze.
It should be noted that Russia controls 22% of the world’s uranium processing capacity and 44% of enrichment capacity. These services are not available to some Western companies following the US ban on Russian uranium, although exceptions are possible until the end of 2027.
“While higher nuclear fuel prices are likely to hit utilities’ profitability, the bigger challenge is ensuring there is enough investment in mines, conversion and enrichment to meet the demand for extending the life of existing reactors and building new ones. Nuclear fuel companies such as France’s Orano and Britain’s, the Dutch and Germany’s Urenco have pledged to expand enrichment capacity, but none have yet committed to building new conversion facilities in the West.
Companies are seen to be reluctant to make large investments without long-term agreements with nuclear power plant operators, who in turn are not prepared to enter into such agreements without guarantees of supply.
“The tension in the uranium conversion market is due to one simple factor: existing conversion capacities have been mothballed,” said the chief financial officer of Cameco, one of the world’s largest uranium producers. grant isaac.
