Both in the United States and in allied countries, the owners of uranium mines left for conservation have resumed work to take advantage of the increase in demand for nuclear fuel, according to the Bloomberg agency, quoted by Agerpres.

At least five U.S. uranium producers have decided to reopen uranium mines in states such as Wyoming, Texas, Arizona and Utah, where production was stable until governments changed their stance on nuclear power after the Fukushima disaster.

Canada’s Cameco has also begun ramping up production at its MacArthur River and Key Lake uranium mines in western Canada’s Saskatchewan province after freezing operations from 2018 to 2021 due to unfavorable market conditions.

But now, as governments turn again to nuclear power to meet their emissions targets and uranium producers struggle to meet demand, uranium prices are rising. And it allows uranium operations, which were once unprofitable, to cover supply shortfalls.

Kazakhstan, Canada and Australia account for about two-thirds of the world’s uranium production. As countries increasingly look to nuclear power as a response to climate change, demand for uranium has exploded. The International Atomic Energy Agency estimates that the world will need more than 100,000 tons of uranium per year in 2040, requiring a doubling of mining and processing compared to current levels.

The Canadian group Cameco Corp. and Kazakhstan’s Kazatomprom, which together are responsible for half of world supplies, had problems increasing production. The companies warned that there were some operational blockages that would reduce uranium production in the coming years.

Reopening small mines will not solve the problem of uranium shortage

“We are in a classic situation of supply shortage. With the advent of new reactors, demand is increasing again,” says Scott Melby, vice president of Texas-based Uranium Energy Corp. Production has not kept up with demand due to years of neglecting investment in mining and exploration, said Melby, whose company has decided to reopen mines in Wyoming and Texas that it placed on conservation in 2018.

Bloomberg notes that the output that will come from these mines, most of which are small and nearing the end of their lives, will represent a small fraction of the world’s uranium supply.

“Obviously the industry is trying to respond to that by reviving smaller mines, but when you have a mine that’s been idle for a long time, it’s clear that production isn’t going to be significant,” says John Ciampagli, managing director of Sprott. Asset Management, which manages the Sprott Physical Uranium Trust.

Nevertheless, the reopening of uranium mines means the revival of an American industry that was in danger of disappearing five years ago. U.S. uranium production hit an all-time low of 77 tons in 2019 from a peak of 22,000 tons in 1980 as the U.S. became increasingly dependent on imports from countries such as Canada, Australia, Kazakhstan and Russia.

To keep up with demand, the Uranium Producers Association of America estimates that eight to 10 new large mines will be needed to begin production over the next decade.