Uranium prices rise as interest in nuclear power grows

The price of uranium has been on the rise, driven by constrained supply and accelerating demand, against a backdrop of renewed interest in nuclear power.

The benchmark contract for uranium oxide which, once enriched, is used as nuclear fuel, rose to $85.75 a pound (around 450 grams) on Dec. 15 for the first time since January 2007.

This price rise is the result of a combination of factors, notably the rebound in demand due to renewed interest in nuclear power, but also due to fears about oil and gas supplies following Russia's invasion of Ukraine.

The higher prices will cause headaches for countries that rely heavily on nuclear energy, such as France, which generated almost 70 percent of its electricity from nuclear power in 2021, according to the U.S. Energy Information Administration.

France, along with Belgium, the U.K. and Romania recently authorized the extension of the operation of several existing power plants.

In the United States, California's public utilities commission approved a five-year extension last week to the lifespan of two reactors close to Los Angeles, which were originally scheduled to close in 2024 and 2025.

New projects have also been launched, particularly in China, where 25 reactors are under construction - as well as in India, Türkiye and Egypt.

Demand for nuclear power has been rising, but "the supply has not really responded," according to Jonathan Hinze, president of nuclear industry research firm UxC.

This is particularly true in Kazakhstan, which is the world's largest uranium producer by far, accounting for 43 percent of global production last year, according to the World Nuclear Association (WNA).

Kazakhstan has faced logistical problems, in particular a shortage of...