Uranium Week: Bill Gates’ Commitment To Nuclear

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As the uranium spot price rises 13% over the last seven weeks, Bill Gates outlines the role for nuclear power in the energy transition.

-Bill Gates sees a future with more nuclear power
-G7 communique relating to nuclear
-Uranium spot price rises by 1.3% for the week

At a virtual event hosted last week by the Nuclear Energy Institute (NEI), Bill Gates addressed participants at the annual Nuclear Energy Assembly on ways to decarbonise the power grid. Gates finds it hard to imagine a future where this can be achieved affordably without using more nuclear power.

Last week’s Uranium Week article noted the collaboration of TerraPower, founded by Bill Gates 15 years ago, in a plan to launch a next-generation, small nuclear plant in the US. For further details please refer to: https://www.fnarena.com/index.php/2021/06/08/uranium-week-gates-and-buffett-combine-on-nuclear/

As part of his address, Bill Gates explained he had a strong belief “that nuclear power must play a role in getting the world to net zero. To reach that goal, we need to work together, just as virologists worked together to create covid vaccines at the fastest pace in human history. Never before has there been a greater need to collaborate across the industry – from technologists, to utilities – with a common vision for the role of nuclear in our electric grid".

Gates went on to detail how "TerraPower's Natrium energy system redefines how nuclear power is designed and offers a different value proposition. Instead of using a reactor's heat to generate steam and spin a turbine, Natrium uses it to run a massive molten salt energy storage system, one that is an order of magnitude larger than the biggest lithium ion battery storage system currently in existence. 

"That means Natrium can provide steady baseload power when needed, but it can also ramp up and down as generation from variable renewable technologies like wind and solar falls, when the wind stops blowing or the sun stops shining. In addition, Natrium's design reduces the costs and the time of construction for nuclear power plants, while increasing flexibility to make the plant more valuable to utilities.”

Group of Seven on Nuclear

The Group of Seven nations in a communiqué last week stressed “that international investments in unabated coal must stop now and we commit now to an end to new direct government support for unabated international thermal coal power generation by the end of 2021."

The nations vowed to focus on other technologies, including carbon capture, to help speed up the transition away from coal.

“We will focus on accelerating progress on electrification and batteries, hydrogen, carbon capture, usage and storage, zero emission aviation and shipping, and for those countries that opt to use it, nuclear power,” the communiqué said.

Company news

ASX-listed Deep Yellow ((DYL)) announced last week that drilling completed at the Tumas 3 Central deposit in Namibia is indicating that expectations for the conversion rate to the Indicated Resource category are being met. 

Once the resource upgrade drilling is completed in this area a new Mineral Resource Estimate will be undertaken for the Tumas 3 West, Central and East Deposits, expected to be released late June.

Uranium pricing 

TradeTech's Weekly Spot Price Indicator is US32.40/lb, an increase of $US0.40 from last week. The Indicator again reached a year-high for 2021, up 13% in the last seven weeks.

The weekly spot price has risen nearly 7% in 2021, averaging a 0.3% weekly gain. The average Weekly Spot Price Indicator in 2021 is US29.85/lb, US$0.14 above the 2020 average.

Buying parties were primarily traders and producers, reports independent consultant TradeTech. Financial entities were mostly absent as buyers. However, reports that Yellow Cake Plc is planning on converting 25m of shares in order to raise approximately US$100m for uranium purchases was viewed as the impetus for sellers to raise their offer prices.

In addition, a significant increase in demand by non-US utilities for delivery just outside of the spot delivery window is exerting upward pressure on spot uranium prices. 

A total of just under 1mlbs U3O8 traded in nine transactions over the course of the week.

TradeTech's term price indicators are US$31.50/lb (mid) and US$35/lb (long).

Buyers willing to agree to delivery in the mid-term delivery period continue to see relatively flat prices when compared to the price increases noted in the spot uranium market. This is especially if the transaction involves limited quantities and price exposure for the seller, explains TradeTech. 

In the long-term delivery time frame, uranium sellers continue to compete aggressively, especially for end user business regardless of the delivery period. Utilities are receiving multiple offers that are below the published price indicators.

The current focus by utilities to pick up material that falls just outside of the spot delivery window, but does not involve multiple deliveries, has made it particularly difficult for incumbent producers to replace legacy contracts. It also makes it difficult for new emerging producers to secure new multi-year term contracts that would facilitate financing of their projects.

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