Amazon, Google, and Meta are among the prominent companies advocating for increased nuclear power generation. At the fringes of a recent event, these tech giants signed an agreement to back a threefold increase in worldwide nuclear power output by 2050. This statement aligns with previous commitments made by leading financial institutions last September and political figures during COP28.
So far, 31 nations have endorsed the commitment to increase their nuclear energy output threefold by 2050, alongside more than 140 firms within the nuclear sector. The World Nuclear Association reports that approximately 9% of global electricity production currently stems from nuclear sources, generated through roughly 440 operational reactors worldwide.
The uranium spot price has risen over the past five years, with this increase tied to geopolitical strains and predictions of higher demand. A contributing element is Russia’s invasion of Ukraine along with the ensuing sanctions imposed on Moscow.
Although Russia plays a crucial role globally as a source of natural uranium, pricing pressures are more closely tied to the nation’s capacity for uranium enrichment. Typically, in most reactors, the unprocessed material needs to undergo milling, conversion, and enrichment processes prior to being utilized as fuel.
According to data from the US government, Russia holds roughly 44% of the world’s uranium enrichment capacity. In terms of US demand for enriched uranium, Russia accounted for 27% of this total (SWU) in 2023.
To turn to data from Euratom, Russia provided 37.9% of the total enrichment work to supply EU utilities in the same year.
Faced with this dependency on Moscow, former US president Joe Biden brought in a law banning uranium imports from Russia in mid-2024. The legislation allowed some shipments to continue until the end of 2027, although Russia then hit back with its own measures — placing a temporary ban on these exports to the US.
“The US and Europe can quite quickly bring on new conversion facilities, but enrichment will be more difficult,” Benjamin Godwin, head of analysis at PRISM, told Diwdia |.
“Fluctuations in policy-making within both the US and EU complicate matters for businesses aiming to invest in these resource-heavy initiatives. However, with the Trump administration settling into place, there’s optimism that the sector might receive more definitive guidance on this front,” he noted.
The problem, according to experts, lies with both power plant operators and fuel suppliers being wary of taking the initial step towards committing to upcoming ventures. Nuclear energy producers are unwilling to enter into extended supply contracts without assurance that uranium processing plants will be constructed. Conversely, those looking to expand their processing capabilities hesitate due to the lack of binding commitments from potential purchasers.
"Conversion, enrichment, and deconversion services represent the three stages of the nuclear fuel supply chain where demand could pose challenges to supplies over the next ten years," said Craig Stover, a senior program manager at the Electric Power Research Institute, to Diwdia.
"The biggest limitation lies with enrichment services, as they require the most time to set up new capacities. According to WNA growth forecasts, the demand for enrichment will exceed the supply by 2035 if the current rates continue," he clarified.
Supplies of natural uranium
When it comes to natural uranium, the primary providers to the US include Canada, Australia, and Kazakhstan. In 2023, Canada supplied 27% of the US’s yellowcake imports, with both Australia and Kazakhstan contributing 22% apiece. The data from the US government-operated Energy Information Administration (EIA) shows that materials originating from Russia made up 12% of all deliveries. Conversely, only 5% of these supplies were sourced domestically within the US.
As per Euratom, the primary sources for natural uranium within the EU in 2023 were Canada with 32.94%, Russia with 23.45%, and Kazakhstan with 21.00%. The domestic supply contribution was negligible at 0%.
“Uranium supplies from natural sources come from a variety of locations globally,” said Jamie Fairchild, an analyst for uranium and nuclear fuels at the Nuclear Energy Agency (NEA), speaking to Diwdia. This indicates that the availability of this material is not under threat.”
"We anticipate that rising uranium costs along with increasing demand will encourage fresh exploration efforts and enhancements in mining activities and processing techniques, ensuring sufficient supply for many years ahead," he noted.
After the Fukushima incident in 2011, where a tsunami inundated a nuclear facility in Japan, uranium prices dropped due to widespread public worry about safety. However, in recent times, expenses have gradually increased once more as countries aim to reduce their dependence on fossil fuels. Over the past half-decade, the worth of firms involved in mining, refining, producing, and milling uranium along with related materials has surged over 500%.
The expansion of artificial intelligence is also fuelling the 'nuclear renaissance', as major tech companies invest heavily in power plants to supply energy-hungry data centres. Although certain experts believe that the introduction of DeepSeek’s AI model might reduce this demand, Benjamin Godwin disagrees.
"Although there is substantial potential for advancements to enhance the efficiency of AI, the applications for AI – and AGI once it becomes available – are extremely widespread. Consequently, very few sectors of the worldwide economy will remain unaffected by this technological development," he stated.
Duties on American uranium entering Canada
Despite some limitations on enrichment services, Henry Preston, the communications manager at the World Nuclear Association, informed Diwdia that nuclear power remains more resilient to geopolitical risks compared to other forms of energy.
“Uranium for nuclear fuel can last in the reactor for perhaps a couple of years,” Preston explained, “and then you might have two years’ worth of fuel on the site before refuelling outages”.
Given these extended timeframes, should a shortage occur, stockpiles would prevent immediate repercussions from translating into a sudden surge in energy prices.
Nevertheless, an unpredictable trade climate can influence significant buying decisions over time, which is evident in US President Trump’s ongoing tariff conflict. Trump intends to impose a 10% tariff on energy imports from Canada, causing concern among U.S. nuclear power firms.
A suggested tariff of 10% from a key supplier such as Canada would essentially increase the cost of uranium by 10%. This is due to the fact that U.S. domestic demand remains inflexible concerning committed quantities," stated Grant Isaac, Chief Financial Officer at Cameco, back in February. Based in Saskatoon, Canada, Cameco is among the globe’s leading producers of uranium.
Under a previous trade deal, uranium providers such as Cameco were supposed to shoulder additional expenses related to Trump’s tariffs rather than transferring these costs to US energy companies. However, this arrangement was altered in 2018 due to modifications in the North American Free Trade Agreement, which means the US will bear the financial burden from then onwards.
"To overcome reliance on Russia and other state-run entities, concerted actions from the West are necessary," stated a representative of Cameco towards the end of last year when initial tariff warnings were circulating.
"The statement from Russia about blocking exports to the U.S. underscores what we've been emphasizing for quite a while—that the aggregate risks to the nuclear fuel supply chain are substantial," the spokesperson noted.
