Uranium Week: Open Letter On Climate Change

Weekly Reports | May 18 2021

As the uranium spot price rose 1% for the week, while six nuclear industry groups banded together to highlight nuclear's role in the fight against climate change. 

-Open letter to world leaders on climate change
-Four positive covid-19 results at Cameco
-Uranium spot price rose by 1% for the week

By Mark Woodruff

Nuclear power is currently the biggest source of low-carbon electricity in developed economies and the second largest globally. By 2040, global electricity demand is expected to increase by 50%. However, over the same period more than 100 gigawatts of nuclear capacity is due to retire. 

Against this backdrop, six nuclear industry groups have penned an open letter to world leaders. It pointed to a critical opportunity at the upcoming G7 and Pre-COP summits "to set a bold new direction" in the fight against climate change.

The Conference of the Parties (COP) is trhe decision-making bueau of the United Nations Framework Convetion on Clmaye Change.

The letter, published last week, was signed by the heads of the Canadian Nuclear Association, Europe's Foratom, the Japan Atomic Industrial Forum, the US’s Nuclear Energy Institute, the UK's Nuclear Industry Association and the World Nuclear Association.

The group urged policymakers “to take immediate steps to prevent the premature closure of existing nuclear generation capacity and to accelerate the scale and time frame for investment in new nuclear capacity.”

Those steps include recognising nuclear power in national and international policies and conventions as clean, low-carbon and sustainable. It also includes ensuring equal access to climate financing for all low-carbon energy sources, including nuclear. Finally, another step is maximising the generating potential of existing nuclear reactors and building replacements for retiring reactors.

Company News

In concerning news for the world’s largest publicly-traded uranium company, Canada’s Cameco has announced a fourth positive covid-19 test at the Cigar Lake mine. The company is working closely with health authorities and following their guidance.

Given the apparent connection to multiple cases, Cigar Lake now meets the Saskatchewan Health Authority’s definition of an outbreak. However, Cameco’s extensive health and safety protocols means Cigar Lake is still operating safely.

The restart of the Cigar Lake mine in April is expected to alleviate some of the constrained production output for the industry in the near term, notes industry consultant TradeTech. However, this recent news is a reminder that future production still can be impacted by outside forces and that uninterrupted production from any project is not a given.

Given recent interest in secondary demand, TradeTech highlights UK-based uranium investment company Yellow Cake Plc bought 343,053lbs U3O8 in the market last week. It was acquired at US$29.15/lb for a total cost of $10m.

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