the price of uranium is soaring around the world

While the final text of COP28 calls for a “transition away from fossil fuels” to fight global warming, many countries are investing in nuclear power. But not only for ecological reasons.

After two weeks of negotiations, the final text of COP28 revised its terms, transforming the “exit from fossil fuels” in “transition away from fossil fuels”. This text nevertheless aims to accelerate action “in this crucial decade, in order to achieve carbon neutrality in 2050”. But if the countries of the world are starting to rely on nuclear power, it is also to respond to a concern linked to global conflicts.

Uranium prices are at their highest in 17 years. The reference contract is at 78 euros per pound (around 450 grams), a first since January 2007. It is precisely uranium oxide which, once enriched, serves as fuel to run nuclear power plants. The surge in its price is the conjunction of several factors, including the revival of the atom in the “energy mix” of the great international powers.

Energy and geopolitical transition

France is not the only one to rely on nuclear energy. The United Kingdom, Belgium and Romania are also involved. These states have recently authorized extended operation of their power plants. Even in California, the community services regulator has just validated a five-year extension, concerning the lifespan of two reactors located near Los Angeles. These two reactors were initially scheduled to close in 2024 and 2025. At the same time, new projects are being launched, notably in Turkey, India, Egypt and China, where no less than 25 reactors are under construction.

The energy transition remains the main explanation, but the explosion in demand is also linked to fears over the supply of oil and gas, after the war started by Russia in Ukraine. Operators are also worried about the possible consequences of the military coup that took place in Niger last July. As a reminder, the country accounts for 4% of world production. Added to this is the very recent vote, by the House of Representatives in the United States, of an embargo on Russian uranium (5% of world production), which the Senate has yet to vote on.

Reopening of mines

To supply the market, mines are reopened in several places around the world, notably in Utah, in the American West. Globally, 58,000 tonnes of uranium were extracted last year. And demand pressure will continue to increase. The world’s largest producer is Kazakhstan, which alone supplies around 45% of the market. Here we enter head-on into the geopolitical dimension of the energy transition.