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2016 in Review: "It has never been a worse time for uranium miners"

Nuclear Monitor Issue: 
Jim Green ‒ Nuclear Monitor editor

"It has never been a worse time for uranium miners", said Alexander Molyneux from Paladin Energy in October 2016.1

"No major commodity had a worse 2016 than uranium," Bloomberg said in January 2017. "In fact, the element used to make nuclear fuel has had a pretty dismal decade."2

One of the casualties in 2016 was Cameco, which announced in April 2016 its decision to suspend production at its Rabbit Lake mine and mill and reduce production at McArthur River / Key Lake in Canada. Cameco also curtailed production at its two US uranium mines ‒ Crow Butte in Nebraska and Smith Ranch-Highland in Wyoming. About 500 jobs were lost at Rabbit Lake and 85 at the US mines.3 Cameco expects to post a loss for 2016 and another difficult year lies ahead with a further 120 workers at the Canadian mines to be sacked by May 2017.4 Cameco's battle against the Canada Revenue Agency commenced in the Tax Court of Canada in October 2016 ‒ at stake is a C$2.2-billion tax bill, with Cameco accused of setting up a subsidiary in Switzerland and selling it uranium at a low price to avoid tax.5

Uranium mining ramped up 5‒10 years ago in anticipation of the nuclear renaissance that never materialized. Hence a glut, hence the low price. The price has fallen for seven of the past nine years. The spot price fell 41% in 2016, sinking to a 12-year low (US$18 / lb U3O8 in November).2

The spot price averaged about $26 last year, and is expected to average just $23 in 2017 according to the median forecast of analyst estimates compiled by Bloomberg in December 2016.2,6

"I don't think there's a mine profitable at current spot prices," Leigh Curyer from Canadian uranium miner NexGen Energy told Bloomberg.2

The long-term contract price fell from $44 in January 2016 to $30 in December.7 It would need to double to encourage the development of new mines. KPMG noted in December that "uranium producers are expected to reduce production and cut costs through 2017 and 2018, with high cost mines likely to scale back or close. New projects are expected to remain on hold."8 RBC expects the sector will be oversupplied until around 2024.9

A slight reprieve in the uranium slump occurred in December 2016, apparently motivated by US president-elect Donald Trump's tweet that the US needs to "greatly strengthen and expand its nuclear [weapons] capability".10 But the US already has vast amounts of fissile materials available for weapons.

A further reprieve came in January 2017, with Kazakhstan ‒ which has accounted for more than one-third of the world's total uranium production in recent years ‒ announcing that it would produce 10% less uranium in 2017 than previously planned in response to ongoing oversupply in the uranium market.11

The uranium enrichment industry is in much the same place as uranium mining. The spot uranium enrichment price has fallen consistently since the 2011 Fukushima disaster, and it fell by a third between early 2015 and late 2016 to reach an all-time low.12

And since cheap, abundant enrichment capacity can substitute for newly mined uranium (either by extracting more uranium-235 during uranium enrichment, or re-enriching tails), this has and will continue to keep uranium prices down. Former World Nuclear Association executive Steve Kidd wrote in December 2016:12

"Since the beginning of the commercial nuclear era in the 1950s, there have always been fears of a shortage of uranium. The anticipated need to move quickly to fast breeder reactors didn't happen as higher uranium prices stimulated an enhanced exploration effort, leading to significant increases in proven resources. There remains a general expectation, however, that at some point increased uranium demand will create the need to exploit higher cost deposits, necessitating uplifts to prices. This now looks highly unlikely.

"A lower enrichment price means that more enrichment will be used as opposed to uranium in creating the required enriched uranium and this will be reflected in the selection of lower tails assays at the plants. There is an optimum for the buyer for every mix of uranium and enrichment prices, and uranium demand will now be notably lower. Hence there is an important impact on uranium prices which themselves should be pushed down by lower enrichment prices."


1. Geert De Clercq, 3 Oct 2016, 'Desperate uranium miners switch to survival mode despite nuclear rebound',

2. Joe Deaux, Natalie Obiko Pearson, and Klaus Wille, 6 Jan 2017, 'World's Worst Commodity Radioactive for Investor Portfolios',

3. World Nuclear News, 22 April 2016, 'Cameco scales back uranium production',

4. Cameco, 17 Jan 2017, 'Cameco Announces Preliminary 2016 Earnings Expectations and Operational Changes Planned for 2017',

5. Ian Bickis, 3 Oct 2016, 'Cameco and the CRA head to court over potential $2.2-billion tax dispute', The Canadian Press,

6. Ben Sharples, 11 Jan 2017, 'Uranium Gains 10% as Top Producer Plans Output Cut Amid Glut',


8. KPMG, 18 Nov 2016, 'Commodity Insights Bulletin - Uranium Q2, 2016 ‒ Q3, 2016',

9. Peter Ker, 22 Jan 2017, 'Bulls and Bears: A new ERA for Australia's original uranium miner?',

10. David Smith, 23 Dec 2016, 'Trump calls on US to 'greatly strengthen and expand' nuclear weapons capability',

11. World Nuclear Association, 10 Jan 2017, 'Oversupply prompts Kazakh uranium production cut',

12. Steve Kidd, 8 Dec 2016, 'Uranium enrichment – why are prices now much lower and what is the impact?',