As the dominant producer of enriched uranium, Russia became the world’s main supplier of the fuel needed to power nuclear energy projects, as many countries find it difficult to decrease their dependency on Moscow for the fuel. Russia supplies around 40 percent of the world’s enriched uranium, followed by China (17 percent), France (12 percent), the U.S. (11 percent), the Netherlands (8 percent), the U.K. (7 percent), and Germany (6 percent). Shifting dependence away from Russia has been very difficult, as alternative supplies simply do not exist in the way they do for other energy sources, such as oil and gas.
In June, the European Commission said it did not plan to impose limits on the EU’s import of Russian enriched uranium alongside a proposal on the potential ban of Russian gas imports by the end of 2027. After initially saying that it would introduce trade measures targeting enriched uranium, the EU energy commissioner Dan Jorgensen said, “That will also come, but in the first stage, we’ll be focusing on the gas.” He added, “The question about nuclear is, of course, complicated, because we need to be very sure that we are not putting countries in a situation where they do not have the security of supply. So, we’re working as fast as we can to also make that a part of the proposal.”
In 2023, Russia continued to supply 38 percent of the EU’s enriched uranium and 23 percent of its raw uranium, according to the think-tank Bruegel. The EU spent around $1.18 billion on Russian nuclear fuel in 2024, according to EC estimates. Meanwhile, five EU countries – Bulgaria, the Czech Republic, Finland, Hungary and Slovakia – all have Russian-designed reactors that were developed to run on Russian fuel. All except Hungary have now signed deals to use alternative suppliers, although the shift away from Russian uranium is expected to take several years.
Meanwhile, the global demand for enriched uranium is expected to grow significantly in the coming decades as several countries invest in a new era of nuclear expansion. A report published by the World Nuclear Association (WNA) in September said that the global demand for uranium is expected to increase by almost a third to around 86,000 tonnes by 2030 and to rise to 150,000 tonnes by 2040. However, to meet this demand while decreasing reliance on Russian uranium, several countries will need to invest in accelerated permitting, mining innovations, and new exploration for uranium.
The report showed that uranium production from existing mines is expected to halve between 2030 and 2040, resulting in a significant supply gap. As many countries around the globe begin to invest in new nuclear reactors, as well as alternative projects such as small modular reactors (SMRs), there will simply not be enough fuel to power these operations if greater efforts are not made to finance new uranium operations.
Kazakhstan is currently the world-leader in uranium production, now contributing 40 percent of the global supply, of which the country owns around half. Meanwhile, Russia continues to dominate the world’s enrichment capacity. The world’s uranium market is seeing annual growth of between one to two percent, according to estimates. Boris Schucht, the CEO of uranium enrichment firm Urenco, said, “It’s a small, growing market. It’s a limited market, [that’s] not very big, and it’s very expensive to develop technologies in this market. So that makes the market pretty complex.”
The Dutch-British-German consortium decided to terminate all its existing Russian contracts in 2022 and now aims to increase its capacity of Low Enriched Uranium (LEU) by 1.8 million Separative Work Units across its four sites in Eunice, New Mexico, the Netherlands, Germany, and the U.K. This is one of many companies looking to start to increase their LEU supply to meet the growing global demand.
The U.S. has ramped up efforts to mine uranium in recent years, increasing production from 22,680 kg in 2023 to 307,082 kg in 2024. It commenced large-scale exploration drilling activities in 2024, in a bid to reduce reliance on Russia, drilling 1,324 holes. Under the Biden administration, the U.S. Department of Energy worked to expand domestic commercial LEU. Before leaving office, in December, Biden announced the selection of six companies from which it can sign contracts to procure LEU to incentivise the development of new uranium production capacity in the United States.
Meanwhile, in 2024, the U.K. said it would be the first European nation to produce advanced nuclear fuel, with plans to develop Europe’s first high-assay low-enriched uranium (HALEU) facility. The U.K. government awarded $267.1 million to Urenco to develop the enrichment facility, which is expected to start producing fuel in 2031, and will be ready for domestic use and export within the next decade.
The global demand for enriched uranium is expected to grow significantly in the coming decades in response to a nuclear revival in several countries. However, producing the uranium needed to fuel a new nuclear era will be extremely complex, due to the strict sectoral regulations and the current limited global production capacity. Greater funding must be invested in research and development, as well as into new production facilities around the globe to support the world’s nuclear energy aims.
By Felicity Bradstock for Oilprice.com
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