November 18, 2009

Uranium to 2020 Update

world uranium production by country up to 2008

The Ux Consulting Company (UxC) has the Uranium Suppliers Annual. This is a report that nuclear industry businesses pay money to get.

They are projecting Kazakhstan increasing their uranium production to about 40,000 tons/year. Kazakhstan will continue its growth until 2015-2017. Kazakhstan is producing about 12,500-13,000 tons in 2009. In 2008, Kazakhstan produced 8521 tons.

UxC is projecting large gains in new mines in Africa, Canada, Russia and Australia.

Canada has had some delays because of some water flooding problems at the Cigar Lake mine. Also, the Midwest mine in Saskatchewan was shelved until uranium prices are higher. Currently uranium is at $45/pound.

target=blank>Canada's production does look to be back up from 2008. Cameco (which produces most of Canada's uranium) production at the end of the third quarter of 2009 was 9.3 million pounds U3O8 compared to 8.5 million pounds over the same period in 2008. We continue to expect our share of production to be 13.1 million pounds in 2009.

the first 9 months are up 2700 tons of Uranium. Canada should be up 3000 tons from 2008.

Another attempt is being made to dewater the Cigar Lake mine

The inflow on the 420 metre level that forced suspension of dewatering on August 12, 2008 has been remediated by remotely placing an inflatable seal between the shaft and the source of the inflow and subsequently backfilling and sealing the entire development behind the seal with concrete and grout. The 420 level is not part of future mine plans.

It is currently expected to take six to 12 months to dewater and secure the mine depending on what conditions are found in the shaft and the underground workings

Michael Dittmar has been getting some notice around the internet about a claim that uranium supplies cannot/will not be increased from uranium mines around the world Many people who are using his report do not have time to read through more than the highlights and assume that his work is thorough.

Dittmar is biased. Problems and errors with his four papers have been pointed out to him and he ignores it. Also, his work as a particle physicist is not very good either as he is willing to be scientifically dishonest and misinterpret research papers even when the authors are in the room during his presentation and telling him he is wrong.

The link being one of the top ten that comes up when we search his name. dittmar's particle physics presentation

The Dorigo presentation (PHd, works at Tevetron and Harvard)

[dittmar physics talk] most definitely places a strong claim on the prize of the most obnoxious talk of the year. Unfortunately for all, it was just as much an incorrect, scientifically dishonest, and dilettantesque lamentation, plus a defamation of a community of 1300 respected physicists.

He ignored the interpretation of the people who wrote the papers he quoted in a presentation he was giving. He had a predetermined point of view and interpreted things to substantiate that view.

Namibia's Valencia mine is expected to produce 1,000 tU/year. It is expected to open in 2010, which is a delay from 2009.

A previous look at a mining forecast until 2020 There have been some delayed projects and the low price is a factor ($45/lb). A lot of new uranium capacity is being brought online and the resources from delayed project

The Malawi Kayelekera began exporting uranium on Sept, 2009 It will be producing 1269 tons per year.

On Oct. 29, 2009, Paladin Energy Ltd announced that is to conduct an optimisation study at Kayelekera whereby it intends exploiting some additional resource by extending the west wall of the current planned pit. This study will be targeting an increased production rate of 3.8 Mlb U3O8 [1,462 t U] pa (from current 3.3 Mlb U3O8 [1,269 t U] pa) with minimal capital requirement (estimated at US$10-$15M) by utilising existing excess capacity. It is expected this production rate will be achieved by mid calendar 2012.

Paladin Energy: delays to an upgrade at the Langer Heinrich mine in Namibia and the replacement of equipment at the Kayelekera venture in Malawi meant production rose at a slower-than-anticipated pace. The Australian miner said it plans to more than double output from its African operations during the next five years by spending as much as $365 million on expansion.

The Olympic dam mine in Australia is expected to be expanded. A decision will be made by the Australian government July 2010

There was an accident at the Olympic dam mine, but production will be fully restored by the third quarter of 2010.

Niger is heading to 10,000 tons per year of uranium production (around 2012-2014). They are finding quality uranium mines in Niger using $5 million per year in exploration spending.

In Niger, Areva should invest 1.2 billion euros ($1.7 billion) in the Imouraren project, scheduled to come on stream in 2012. The project is already delayed a year because of political turbulence in the country. "We will decide in 2011-2012 whether we should scale it for 2,000 tons or 5,000 tons or even 7,000 tons," S├ębastien de Montessus, director of Areva's mining business unit said. The current uranium price (US$ 55 / lb U3O8) wouldn't be enough to make an investment of $500 million to $1.5 billion profitable, De Montessus said. "The market price has to go up to $70 to $80." Bloomberg June 23, 2009

Details of the new mine results and exploration at Rossing (Namibia)

We believe a total resource of 500 Mlbs (250,000 tons) is achievable from targets already defined. The Company is now well advanced with the Rossing South Feasibility Study on Zones 1 and 2 and the project is shaping up to be one of the world's largest uranium mines, capable of producing 15 Mlbs of U3O8 per year. (7500 tons per year)

Namibia is mining friendly. Paladin commissioned Langer Heinrich in 2007 on time and on budget, and continues with the process of ramping production to what could amount to 3000 tons of uranium a year, at a cash cost of USD 25/lb, by the second half of 2010.

Namibia's more recent potential was startlingly highlighted by the August 2007 purchase by French transnational Areva for USD 2.5bn of Uramin. Trekkopje will be a big mine.

Berkeley has 26m pounds of 450 parts per million uranium oxide at its Spanish projects; analysts familiar with the company reckon this resource will potentially triple in 2010 as Berkeley moves onto the Toronto Stock Exchange, and into production at around 1000 tons a year by 2012.

Berkeley's Salamanca project would be the restart of an old mine, one shut down in 2000 by Spanish state company ENUSA following sustained low uranium prices. Relative to other projects with a similar deposit base, Salamanca rates as very low cost on capital expenditure, with operating expenditure likely to be around USD 30/lb.

Rossing and Trekkopje will be expanding and ramping up production over the next few years.

Energy Resources (Rio Tinto Subsidiary) reported uranium production for the first three quarters of the year was 4,100 tons, up 11% on 2008. [over 400 ton increase]

Jordan has discovered some shallow easy to mine uranium deposits

Jordan already had a lot of uranium in phosphate deposits. China National Nuclear Corporation General Manager Kang Rixin expects that the first batch of uranium from Jordanian resources will be transported home in 2010; the total quantity probably will be 700 tons. (Caijing Magazine July 5, 2009). It has been expected that the uranium from Jordan phosphate would scale to 2000 tons per year.

Russia is developing the Elkon mine

Russia is developing the Gornoe mine (600 tons) for 2010-2012.

2009 should have 50,000+ tons of production

2010 should have 56,000+ tons of production
another 3000 tons from Kazakhstan, Valencia in Namibia, Full year of Malawi production

The world is going to over 100,000 tons of uranium per year in a business as usual mode before 2020. A lot more than the IAEA/OECD projection seem likely from Kazakhstan and less from Canada until Cigar Lake gets sorted out and depending upon which projects proceed based on uranium prices.

Backstopping regular mining is the large supplies of HEU, LEU in Russia and the US (75,000 ton surplus at the DOE). Another backstop is the depleted uranium.

Eventually prices will go up and some deferred projects like 2300/t per year Midwest mine in Saskatchwan, Canada and full scale up Imouraren in Niger will occur (smaller scale opening likely)

In part 1 of Dittmars uranium doom prediction he offers a bet

For those interested, I am offering a bet that the 2009 and 2010 numbers will not be higher than 45,000 tons and 47,000 tons, respectively.

I am willing to take those bets as stated. I would win and be correct if the 2009 world uranium mining production numbers come out to 45,001 tons or higher and the 2010 production numbers to 47,001 tons or higher.

As indicated, I think 2009 and 2010 should come out much higher even with some delayed projects and the accident at Olympic Dam.

I also predict that Cigar Lake will be producing 4000 tons per year or more before 2020.

Africa and Kazakhstan will be where most of the new uranium production is added leading to 2020. Increases from Canada, Australia, Russia, Jordan and other places as well.

Beyond the highly enriched uranium that Russia is supplying (downblended from decommissioned nuclear bombs or unmade bombs.) The US Department of Energy (DOE) also has 75,000 tons of uranium. Shortfalls in uranium mining from delays can be made up for by nuclear utilities being willing to pay Russia enough or to make arrangements with the DOE. The million tons of depleted Uranium can also be enriched to make several tens of thousand tons of fuel.

Highly enriched uranium can be downblended to be about 18 times as low enriched reactor fuel

There will be no problem powering nuclear reactors with fuel before 2020 and there is plenty of time for prudent steps to be taken. Around 2012-2013 there will be price increases in uranium which will make some of delayed mines profitable.

The table takes the WNA numbers for 2008, 2007 and what I have pieced together for the larger countries for the first 9 months. The numbers are uranium producedin tons. Plus the expected new mines and production in Namibia and Kazakhstan and expected operational expansions or sustained production. Small countries were just carried forward

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