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URANIUM SUPPLY

Uranium production in Russia is carried out by three mining centres owned by ARMZ Uranium Holding Co.: the PMCPA, Dalur mine and Khiagda mine. The PMCPA remains the key uranium mining centre in Russia. In Ukraine, there are three production centres: Ingulskiy mine, Smolinskiy mine and the Novokonstantinovskiy mine, which are all underground mining operations in metasomatite deposits. A fourth underground mine, the Severinsky mine (metasomatite-type deposit), is planned for 2020s and an ISL facility, the Safonovski mine (sandstone-type deposit), is also planned by 2020.

The three producing countries in Africa, Namibia, Niger and South Africa, were joined by Malawi in 2009 when production commenced at the Kayelekera mine. However, the addition of Malawi was short-lived as the Kayalakera mine was shut down in 2014 and is now on care and maintenance. African production decreased from 8 238 tU in 2014 to 7 560 tU in 2016. Although the Husab mine in Namibia began production during this period, this was offset by the closure of the Kayelekera mine in Malawi and declining production in Niger. Overall reduced production during this reporting period is a result of poor uranium market conditions and further reductions in 2017 and 2018 will come as a result of reduced production in Niger and the recent closure of the Langer Heinrich mine in Namibia.

Possible production in Botswana, Tanzania and Zambia, and several projects under investigation in South Africa, could contribute to regional production increases in the future should market conditions and security conditions improve. However, it should be noted that this is seen only as a possibility in the long term, i.e. at least beyond 2030.

Increases in production in the Middle East, Central and South Asia continued into 2016 with a total of 29 177 tU produced. This was driven mainly by Kazakhstan, where production increased from 22 781 tU in 2014 to 23 806 tU in 2015, and 24 689 tU in 2016. It is now by far the largest uranium-producing country in the world, producing 40% of the world’s total in 2016. Uranium was mined at the Kanzhugan, Moinkum, Akdala, Uvanas, Mynkuduk, Inkai, Budenovskoye, North and South Karamurun, Irkol, Zarechnoye, Semizbay, Northern Kharasan deposits. All uranium deposits were mined by in situ leaching acid technique. As of 1 January 2017, the total capacity of uranium production centres in Kazakhstan was 25 000 tU/yr. India and Pakistan do not report production figures, but their combined total is estimated to be about 430 tU in 2014, only a minor increase since the estimated 396 tU in 2014. Uzbekistan did not report production for this edition, and the NEA/IAEA estimates that production decreased somewhat to 2 400 tU in 2016. Iran continues to produce small amounts of uranium from its Gachin deposit and plans to commence production from its Saghand facility in the future. At present the development of mines No. 1 and 2 is being carried out in the Saghand ore field. Jordan continues to develop resources with the aim of producing uranium, but there are currently no firm plans for production.

China, the only producing country in East Asia, reported a small but steady increase in production from 1 550 tU in 2014 to 1 600 tU in 2015 and 1 650 tU in 2016 with six production centres in operation. Production is spread between granite-hosted, sandstonehosted and volcanic-hosted deposits, with granite-related sources slightly higher than the others. Between 2015 and 2016, as a result of sustained depressed uranium prices, the Chinese companies engaged in the uranium industry adopted a series of measures for sustainability. This included closure or provisional suspension of several underground uranium mines with high production costs. In addition, ISL production centres in northern China were built or expanded, and environmentally friendly mines of considerable size were constructed in Xinjiang and Inner Mongolia. As a result, the proportion of production from underground uranium mines decreased significantly, while production from ISL uranium mines increased and dominated the total production.

Australia is the only producing country in the Pacific region. Production increased steadily from 5 000 tU in 2014 to 5 636 tU in 2015, and to 6 313 tU in 2016. Increases can be attributed to start-up of the Four Mile mine in 2014 with uranium processed at the Beverley plant and continued ramp up of production during this reporting period. Additional production increases came from doubling of processing of the stockpiled ore at Ranger.

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Ownership

Table 1.20 shows the ownership of uranium production in 2016 in the 19 producing countries. Domestic mining companies controlled about 55% of 2016 production, which is only slightly lower than the 58.6% reported for 2014. Domestic government participation decreased from 43% in 2014 to 37% in 2016. Non-domestic mining companies controlled about the same amount of production as in the last report, that is, around 43%. However, for this reporting period, the percentage of control (i.e. government vs. private) in this category, for both Australia and the United States, is not known as this data was not reported.

Table 1.20. Ownership of uranium production based on 2016 output

* Secretariat estimate.

NC – Data not available for reasons of confidentiality.

Employment

Although the data are incomplete, Table 1.21 shows that employment levels at existing uranium production centres declined by 16% from 2014 to 2016 However, if future production expansions and restarting of mines currently on care in maintenance in countries such as Australia, Canada, India, Kazakhstan, Namibia, Niger, Malawi and Russia are successfully completed, employment will increase in the longer term. Table 1.22 provides employment directly related to uranium production (excluding head office, R&D, pre-development activities, etc.), in selected countries.

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Table 1.21. Employment in existing production centres of listed countries

(person-years)

See notes below in Table 1.22.

Table 1.22. Employment directly related to uranium production

* Secretariat Estimate; NA = Data not available. (a) Olympic Dam does not differentiate between copper, uranium, silver and gold production. Employment has been estimated for uranium-related activities. (b) Employment at mine sites only. (c) Employment related to decommissioning and rehabilitation. (d) The high value for 2015 is due to the Husab mine construction period.

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Production methods

Historically, uranium production has been produced mainly using open-pit and underground mining techniques processed by conventional uranium milling. Other mining methods include ISL (sometimes referred to as ISR); co-product or by-product recovery from copper, gold and phosphate operations; heap leaching and in-place leaching (also called stope or block leaching). Stope/block leaching involves the extraction of uranium from broken ore without removing it from an underground mine, whereas heap leaching involves the use of a leaching facility on the surface once the ore has been mined. Small amounts of uranium are also recovered from mine water treatment and environmental restoration activities.

Over the past two decades, ISL mining, which uses either acid or alkaline solutions to extract the uranium directly from the deposit, has become increasingly important. The uranium dissolving solutions are injected into and recovered from the ore-bearing zone using a system of wells. ISL technology is currently being used to extract uranium from sandstone deposits only and in recent years has become the dominant method of uranium production.

The distribution of production by type of mining or “material sources” for 2013 through 2017 is shown in Table 1.23. The category “other methods” includes recovery of uranium through treatment of mine waters as part of reclamation and decommissioning, and more recently production from refinery wastes in Canada was included.

Table 1.23. Percentage distribution of world production by production method

(a) Includes production from refinery wastes in Canada; 14 tU in 2015 and 17 tU in 2016.

As can be seen in Table 1.23, ISL production has continued to dominate uranium production, largely because of the rapid growth of production in Kazakhstan along with other ISL projects in Australia, China, Russia and Uzbekistan. Note that not all countries report production by method, and for this reporting period, the United States, where most of production is by ISL, this information is not available. World uranium production by ISL amounted to 49.7% of the total production in 2016 and a similar percentage of about 48.1% was estimated for 2017. The co-product/by-product method could increase in importance in coming years, if the planned expansion of Olympic Dam proceeds.

Projected production capabilities

To assist in developing projections of future uranium availability, member countries were asked to provide projections of production capability through 2035. Table 1.24 shows the projections for existing and committed production centres (A-II columns) and for existing, committed, planned and prospective production centres (B-II columns) in the <USD 130/kgU

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category through 2035 for all countries that either are currently producing uranium or have plans and the potential to do so in the future. Note that both the A-II and B-II scenarios are supported by currently identified local RAR and IR in the <USD 130/kgU category, with the exception of Pakistan.

Table 1.24. World uranium production capability to 2035

(in tonnes U/year, from RAR and inferred resources recoverable at costs up to USD 130/kgU)

A-II = Production capability of existing and committed centres supported by RAR and inferred resources recoverable at <USD 130/kgU. B-II = Production capability of existing, committed, planned and prospective centres supported by RAR and inferred resources recoverable at <USD 130/kgU. * NEA/IAEA estimate. ** By-product production. *** Production capability projections. (a) The projections do not take into account the recent announcements concerning the production suspension at McArthur/Key Lake. (b) Total Includes also production from mine rehabilitation.

Several current or potential uranium-producing countries including Argentina, Botswana, China, India, Mauritania, Mongolia, Namibia, Niger, Pakistan, Spain, South Africa, Tanzania, the United States, Uzbekistan and Zambia did not report, or only partially reported, projected production capabilities to 2035. In some countries, the NEA/IAEA suggested updates to the submitted data in order to take into account recent and important changes since the cut-off date for submission of data. As a result, estimates of production capability for many countries were developed by the NEA/IAEA using data submitted for past Red Books, company reports and other public data.

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The reported projected production capacities for existing and committed production centres in the A-II category for 2017 was 70 179 tU, while the NEA/IAEA Secretariat estimates that the actual production for 2017 was 59 342 tU, which is 85% of the projections. For comparison, the projected 2015 production capability was estimated initially as 67 240 tU. However, actual 2015 production amounted to 60 291 tU, or about 90% of stated production capability. In 2013, production amounted to 54 740 tU, or about 80% of stated production capability, 75% in 2011, 76% in 2007, 84% in 2005 and 75% in 2003, demonstrating that full capability is rarely, if ever, achieved. In 2017 production amounted to 84% of total B-II capability, 90% in 2015, 80% in 2013 and 73% in 2011, 2010 and 2007, 81% in 2005 and 74% in 2003.

Since 2003, expansion in production capability was being driven by generally higher uranium prices, and production had correspondingly increased during the same period, although not as rapidly as the projected production capability. Despite the sustained depressed uranium market over the last several years, production increased over this reporting period; mainly due to the start-up of the large Cigar Lake mine in Canada and continued expansion of production in Kazakhstan and to a lesser extent some of the overall increases came from Australia and the starting of Husab mine in Namibia. That production increased even during these poor market conditions can be attributed to the long planning times and investment required to bring new production into the market and the time it takes to respond to changing demand and market conditions. Thus, these new production centres are responding to the increased demand and concurrent rise in uranium market prices from over a decade ago. However, this is changing as producers are now adjusting to the sustained downturn in the uranium market. In 2018, some producers have already made announcements regarding shutdowns and scaling back in operations. Additionally, the growth in production capacity has decreased during this reporting period. In addition, it should be noted that turning stated production capability into production takes time, expertise and investment, and can be confounded by unexpected geopolitical events, legal issues and technical challenges.

There continues to be a delay in the expansion of the Olympic Dam project in Australia, first announced in August 2012, there is still no recent update, which makes the timing of the additional production from this project uncertain. In addition, several projects have been put on hold in Australia (Honeymoon), in Malawi (Kayelekera) and in Namibia (Trekkopje mine). In the near-term production capability will decline and in the short to medium term, expansion will come mainly from development of ISL projects in Kazakhstan and to a lesser extent in China, production from the Cigar Lake mine in Canada, and production from the Husab mine in Namibia.

The current report shows that projections of production capacity have decreased when compared to the projections made for the same year in the last Red Book 2016, as developments are being brought in line with the slowdown in nuclear generation capacity growth since the Fukushima Daiichi accident (see Table 1.24). Comparing future capabilities, projections to 2020 are 5-6% lower than what was reported in 2016 for A-II and B-II categories, respectively and in 2035 the difference is 13-15% lower for A-II and B-II categories, respectively. Comparing the values reported for 2017 to 2013, there are even larger differences, which can be expected because of the continuous updating of plans and responses to the market conditions and the amount of time it takes to respond to these changes. In the longer term, growth prospects for nuclear power will also be affected, but to what degree it is not certain as projections of this nature over the long term are subject to numerous factors. Due to adjustments to recent events, and the depressed uranium market, the revised figures on production capability to 2035 have decreased overall from the projections in the 2016 Red Book.

As currently projected, production capability of existing and committed production centres is expected to reach over 67 335 tU/yr in 2020, increasing only 1% to about 67 955 tU in 2025, then decreasing to 64 735 tU in 2030 and decreasing again to 56 625 tU in 2035. Total potential production capability (including planned and prospective production

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centres, category B-II) is only expected to rise to 81 360 tU/yr by 2025, followed by a slow increase to around 86 740 tU/yr and 90 690 tU/yr in 2030 and 2035, respectively. The current projections for B-II category indicate a steady growth in production capability with an increase of 19% from 2020 to 2035. For comparison, the predicted rate of growth over the same period was 31% in the 2016 edition of the Red Book.

Recent, committed mines and expansions

There was limited new production started during this reporting period. Production in Canada at the world’s highest-grade uranium mine, Cigar Lake, commenced in 2014 with the first commercial production in 2015. In Kazakhstan, ISL pilot production at site No. 4 of the Budenovskoye deposit was completed in 2015 and has proceeded to commercial production. This was followed by the first production from the Husab mine in Namibia, which produced just about 200 tU in 2016. Production at the Lance (Ross) mine in the United States began in December 2015 with the first delivery of drummed product in June 2016. However, production was decreased in late 2016 in response to low uranium prices and the project is currently amending their licence to change to a low pH (acid) leach. Table 1.25 summarises these recent developments, adding some detail to the global capacity expansions outlined in Table 1.24. Committed production centres (C) are those that are either under construction or are firmly committed for construction, whereas expansions (Exp) are planned capacity increases at existing sites (E).

Table 1.25. Recent, committed mines and expansions

(in year of estimated first production and tonnes U per year estimated production capacity)

E = existing; C = committed; Exp = expansion.

1)BHP has proposed trials of heap leach technology, which should assist the company in assessing less capital-intensive mineral processing technology for ore mined underground.

2)Approval has been granted to extend the capacity of the Beverley plant to produce 1 500 t of uranium oxide concentrate (1 270 tU) per year when the company decides it is commercially viable to do so. Satellite ISR operations are proceeding at the Pepegoona and Pannikan (including Four Mile) deposits. Uranium resins from satellite ion-exchange plants are trucked to Beverley for further processing.

3)Amending licence and permit to change to low pH (acid) leaching.

There are some additions to the existing and committed production capacities until 2020, with production increases projected mainly in Namibia as the Husab mine ramps up production and reaches full capacity. Other additions to the existing and committed production capacities through 2035 are projected in Australia, Brazil, India, Kazakhstan, Russia, Ukraine and the United States.

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Planned and prospective production capability is predicted to gradually ramp up through 2025 and may continue through 2035 with the main increases coming primarily from the planned expansion of the Olympic Dam deposit in Australia. Other increases, which may include new mines, are projected from Argentina, Botswana, Finland, India, Greenland, Mauritania, Mongolia, Namibia, Niger, South Africa, Spain, Russia, Tanzania, Ukraine, United States and Zambia. Production in countries such as Canada, China and Uzbekistan are projected to remain relatively constant, with only minor increases or decreases. Kazakhstan, on the other hand, has a long-term forecast for production to start decreasing after 2025.

Total production capacity could increase by more than 31 000 tU by 2035 (see Tables 1.24, 1.25 and 1.26). It is important to note, however, that many of these projected increases in production capacity will likely only go forward with strengthening market conditions. Increased mining costs and development of new exploitation technologies, combined with risks of producing in jurisdictions that have not previously hosted uranium mining, mean that strong market conditions will be needed to secure the required investment to develop these mines.

In addition, several prospective and planned production centres were noted in national reports and company reports for which a projected start-up date, and in some cases mine capacities, have not yet been determined (see Table 1.26). While there is greater uncertainty surrounding the development of these sites, these potential capacity additions underscore the availability of uranium deposits of commercial interest. Once again, it must be noted that strengthened market conditions will be necessary before mine developments will proceed. Additionally, since these sites span several stages of approvals, licensing and feasibility assessments, it can reasonably be expected that at least some will take several years to be brought into production.

Table 1.26. Prospective and planned mines (estimated production capacity in tU/yr)*

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Table 1.26. Prospective and planned mines (estimated production capacity in tU/yr)*

(cont’d)