World trade in uranium

Rajesh Sinha 2011SMN6502

S Gayathri 2011SMN6509

Arjun Srivastava 2011SMN6518

World Trade in Uranium

Uranium:Naturally occurring with several isotopesU235 is fissile and used as a fuel in nuclear reactors

Concentration to be increased to 3 to 4% for use in civil nuclear reactors

Mined in form of uranium oxide U3O8

Introduction

Sources of Uranium

1. Uranium extracted through mining of natural mining deposits

2. U235 extracted from decommissioned nuclear weapon warheads and blended down to commercial enrichment

Sources of Uranium

Mined Uranium

Companies mining uranium

US-Russian Highly Enriched Uranium (HEU) Agreement

Government-industry partnershipRussia is dismantling a portion of its old Soviet-era

nuclear warheadsHEU is removed from warheads and blended with

uranium of lower U235 enrichment to produce LEU

Shipped to USA

Secondary Source

The Uranium market has a history of volatilityNot only moves with supply and demand forces, but

also with geopoliticsPresently the economically recoverable price of

Uranium is US$ 130/kgWorld’s measured Uranium resources will last 80

years at this price and current consumption

Uranium Market

Demand and supply of Uranium

1. Specified Pricing Either fixed price, or base price plus adjustment for

inflation

2. Market-Related Pricingbased on the uranium market price at or near the time of

delivery, and/or some other published market indexprice is the market price less a discount (or plus a

premium)greater level of uncertainty

Pricing (long-term contracts)

Negotiated Pricing contracts in which prices are agreed to periodically (usually annually) by the buyer and seller

Hybrid Pricing involves a market index which is averaged with either a base-escalated, fixed, or cost-related price

Cost Related Pricing defined by a price that is tied to the cost of production from a uranium mine

Portfolio or Realised Prices Suppliers and utilities generally operate a portfolio strategy by concluding contracts periodically over the long term

Other Pricing Mechanisms

Uranium prices in international market

Graph courtesy of UxC

Uranium Spot Price on 11 Nov 13

Source: http://www.uxc.com

Nuclear Non-Proliferation RegimeNuclear Non-Proliferation TreatyInternational Framework for Nuclear Energy

Cooperation (formerly Global Nuclear Energy Partnership)

Fissile Material Cut Off Treaty (FMCT)Nuclear Suppliers Group (NSG)Indian Nuclear Liability LawAustralian Government Policy on Trade in Uranium

Laws Governing Uranium Trade

Period between Signing of Contract and Shipment Long-term contracts signed well before first delivery under

the contracts Take a year or more to finalise after acceptance of the

relevant commercial terms like quantities, delivery schedules, price, and delivery location

Delivery Formats Natural uranium (U3O8 and UF6) is nearly always sold by

“book transfer” It is delivered to the facility, sampled and weighed by the

processor A “delivery” under a sales contract is then made by the

seller giving notice to the facility owner that the uranium ownership is to be transferred

Trade Mechanism for Uranium

November 1991 - imports of uranium products from the then-Soviet Union were being dumped in the US market

October 16, 1992 - governments of the six uranium-producing CIS countries signed quota-based suspension agreements

March 1994 - amendment to the Russian agreement was finalized

December 7, 2000 - US enrichment company, USEC Inc., petitioned DOC to conduct an investigation of dumping into the USA of enriched uranium imports from Europe

December 31, 2001 - DOC ruled that both European enrichers, AREVA NC and Urenco Ltd, were receiving unfair subsidies and, in the case of Eurodif, dumping LEU in the US market

Case Study on Dispute due to Dumping of Uranium

Australia31% of the world reservesWorld's third-ranking producer, behind Kazakhstan

and Canada2012 Australia produced 8,244 tonnes of U3O8

Uses no nuclear power

COUNTRY STUDY

Australian uranium production and exports

Source: http://www.world-nuclear.org

Australian uranium export sales

Source: http://www.world-nuclear.org

15% of the world's uranium resources28% of world production in 2009, then 33% in 2010

and about 35% in 2011Kazatomprom- national atomic company

set up in 1997 and owned by the governmentcontrols all uranium exploration, mining and imports

and exports of nuclear materialsforged major strategic links with Russia, Japan and

China

Kazakhstan

Uranium exploration in Kazakhstan started in 1948Uranium production and revenue in Kazakhstan is

tabulated below

Source: Kazatomprom, currency KZT million

Mining

BN-350 fast reactor was built under Russia's Minatom supervision

Plant has since been decommissionedPlans for future nuclear power include 300 MWe class

units for the western part and smaller cogeneration units in regional cities

Proposals for new nuclear power plant near Lake Balkhash, north of Almaty, and for one or two 300 MWe units at Aktau

In 2012, government was reviewing draft master plan of power generation development in the country until 2030

Nuclear Power in Kazakhstan

Nuclear power is the primary source of energyOut of a total production of 541 TWh of electricity in

France, 75% was produced using nuclear power- highest percentage in the world

Électricité de France (EDF) - main electricity generation and distribution companyIt is owned 85% by the French GovernmentThe company manages 59 nuclear power plants

France

exported 45TWh of electricity to its neighbours making it the biggest energy exporter in the EU in 2012

success story - providing cheap energy with low CO2 emissions

François Hollande's victory in the 2012 Presidential Election - closing the oldest 24 reactors by 2025, reduce share of nuclear power in France to 50%

France

Source: http://en.wikipedia.org/wiki/Nuclear_power_in_France

Active nuclear reprocessing program, at the COGEMA La Hague site

Undertakes enrichment work, MOX fuel fabrication, and other activities at the Tricastin nuclear power centre

2/3 of the output of the nuclear plant at Tricastin powers the domestic enrichment which meets 100% of France's enrichment requirement

Carried out reprocessing of fuel from other countries like the United States and Japan

Fuel Cycle

Does not mine uranium for the front end of the fuel cycle domestically

French companies have various holdings in the Uranium market

10,500 tonnes per year coming from various locationsCanada – 4500 tU/yr.Niger – 3200 tU/yr.

Mining

Disposal of high level nuclear waste planned at Meuse/Haute Marne Underground Research Laboratory deep geological repository

World's largest supplier of commercial nuclear power2013 - nuclear power provided by 100 commercial

reactors operating at 65 nuclear power plantsProduce a total of 790 TWh of electricity- 19.2% of

the nation's total electric energy generation in 2011Following the "Three Mile Island" accident in 1979,

no new nuclear power plant had been started since 1974

United States of America

Considerable opposition to the use of nuclear power in the U.S

132 U.S. nuclear plants built52% of the 253 originally ordered21% were permanently and prematurely closed 27% have completely failed for a year or more at least

onceSurviving U.S. nuclear plants produce ≈ 90% of their

full-time full-load potential - not fully dependable

United States of America

Electricity Net Generation

Electricity Net Generation- Nuclear

Mining 4th largest uranium reserves in the world In 2001, US mined only 5% of the uranium consumed by its

nuclear power plants. Remainder was imported from Russia and Australia. After 2001, with uranium prices steadily increasing, mining

has been revivedFuel Enrichment

United States Enrichment Corporation (USEC) performs all enrichment activities for U.S. commercial nuclear plants.

Fuel Vendors All are light water fuel fabrication facilities because only

LWRs are operating in the US

Fuel Cycle

Reprocessing Potential to contribute to nuclear proliferation, and is

vulnerable to nuclear terrorismObama administration has disallowed reprocessing of

nuclear waste, citing nuclear proliferation concernsWaste Management

As plants continue to age, many on-site spent fuel pools have reached their capacity

Prompted creation of dry cask storage facilitiesApproximately 65,000 tons of nuclear waste now in

temporary storage throughout the U.SPlant Decommissioning

Expensive, tedious and long process13 reactors have permanently shut down

Fuel Cycle

Pricing of uranium is usually through long term contracts

Notwithstanding, there is a thriving spot market for uranium which is traded like any other commodity amongst the countries which are eligible for the same

The principles of supply and demand are equally applicable to the price of uranium

Number of international treaties which control and limit the trade in uranium - non-tariff barriers to trade

CONCLUSION

Australia Largest reserves of uranium It is not the largest exporter due to the anti-nuclear policies of the

countryKazakhstan

Largest exporter Developing technologies to move up in the value chain as most of the

enrichment and fuel fabrication facilities are in countries who are the final end users

France Has negligible reserves Has the largest percentage of national electricity produced using

nuclear powerUSA

Main technology was developed here But left behind by other countries like France due to the strong

anti-nuclear sentiment

CONCLUSION