RE:RE:Russian to Tripple Production by 2015quintessence wrote: Between Husab mine in Nambia that the Chinese are building, Imouraren mine Niger and Cigar Lake, Canada. Then we have the Russians promising to triple their production. All these mines and promises will add another 45 million lbs of uranium into the market by 2015 with a ramping up potential to over 62 million by 2017. There is no shortage of uranium.
I don't see demand catching up to supply until 2020. That doesn't mean the price won't rise, I just don't see it rising very fast. Some analysts are hyping this uranium shortage a little too much for any short term "violent move higher" as someone called it. I'm still anticipating a nice return overall, just not anything erratic like some are predicting. All IMO.
Husab has an operating cost of $32/lb, so that puts a floor on price there. This is after a capital cost of $1.66 billion! Imouraren's costs are a little harder to find but I've seen $55 from a report in 2008. Hard to imagine they have got that below $35 since then. There have been rumours that Areva will announce a delay to 2019. It was originally slated to begin production in 2012. Then we have cigar lake that is going to take a LONG time to ramp up. We know CCO just lowered their guidance going forward. Finally, the Russians. This article from the year 2000 should provide some insight. 4000 tonnes by 2010? Not there yet.
Russia to double uranium production by 2010
Russia wants to double uranium production from the current 2200-2500 tonnes to 4000-4500 tonnes by 2010. The production increase were mainly needed to meet increasing domestic demand, but export also would continue, according to the Russian Chemical Technology Institute. (AFP Nov. 28, 2000) Point being, there is no way 62M lbs will be added by 2017. I'd be surprised if we see 1/3 of that. Production for 2015 will likely be closer to 10M lbs more than today.