Uranium is next yellow fuel

The escalating population and the rising energy demand is forcing the global leaders to look out for more alternative sources of energy. With oil becoming unaffordable and increasing stress on environment-friendly fuels, the only alternative left out seems to be nuclear energy. But then this yellow fuel is not enough to fulfill all energy needs, thus disturbing dreams of energy investors. The uranium market is not only affected by the standard forces of supply and demand but also to whims of geo-politics. There are 440 reactors operating worldwide and 69 reactors under construction. Nations like France, Germany, Netherlands, the UK, USA and Russia form the core of the uranium market and influence all global buyers.

The worldwide demand already exceeds the supply by 139% and the prices have risen by almost 500% in last five years. With China building more nuclear reactors, it will be consuming 11% of the world’s nuclear energy capacity alone. Moreover, China is negotiating with Australian foreign ministry, to purchase 44 million pounds of uranium every year. As per the International Nuclear Inc., the stock of ready-to-use uranium is at an all-time low, and the commercial reserves fell by more than 50%. Global electricity use is projected to increase by 66% i.e. 22 trillion kilowatt-hours by 2020. With current supply at about 135 million pounds per year and mines of Australia & Canada contributing only 79.2 million pounds per year, there seem to be a ‘gold rush’ to purchase this yellow fuel in the near future. To meet increasing energy demand, there is no question that uranium will become a key to global affairs. After being the discarded stepchild, is now offering huge returns compared to any other energy fuel alternative.