About Uranium

Content

Key Descriptors

  • Canada has the world’s largest reserves of high-grade low-cost uranium, located mostly in northern Saskatchewan.
  • Canada is the largest producer of uranium in the world, with 23% of global production in 2007.
  • In 2007, Canada produced 9,476 tonnes of uranium, all from mines in northern Saskatchewan.
  • Nearly 85% of Canada’s uranium production is exported. The remainder is used to fuel CANDU reactors in Canada.
  • Uranium prices have increased dramatically since 2002, after many years of relatively low values. This has led to a frantic pace of exploration activity in Canada and around the world.
  • With its resource base and current output, Canada is well positioned to maintain its leadership in uranium production in the future.

Industry Structure

The Canadian uranium industry is composed of firms that mine and mill raw uranium ore, refine and convert it into uranium dioxide and uranium hexafluoride, and produce fuel bundles for CANDU nuclear reactors.

The key producers in Canada are Cameco Corporation and AREVA Resources Canada Inc., which rank among the world’s leading uranium suppliers. A number of joint venture partners work with Cameco and AREVA in their mining and milling operations. In addition, hundreds of companies in Canada fill specific niches in the uranium industry, such as uranium exploration and engineering services. Canadian uranium meets the nuclear-fuel requirements of electric utilities in Canada and around the world.

In Canada, mining is usually governed by provincial regulations. Uranium production, however, is under federal jurisdiction. Canada’s independent nuclear regulator, the Canadian Nuclear Safety Commission, regulates uranium mines and mills and all subsequent stages of the nuclear-fuel cycle, such as refining, conversion and fuel fabrication, to protect health, safety, security and the environment.

Resource

Most of Canada’s reserves are located in northern Saskatchewan, which hosts the world’s largest high-grade deposits. For example, at the McArthur River mine, the deposits average 18 per cent uranium content, making it the highest grade uranium mine in the world. The deposits mined in Canada have grades that are 10 to 100 times the average grade of deposits mined elsewhere in the world.

Canada’s uranium reserves are the third largest in the world, after those of Australia and Kazakhstan. As of January 1, 2007, Canada held 423,400 tonnes or 9 per cent of the world’s total uranium known reserves recoverable at a uranium price of $100 per kilogram. At higher prices, additional uranium deposits would be deemed economically recoverable, thereby increasing Canada’s uranium reserves.

At current production levels, the known uranium deposits will last more than 40 years. However, geological evidence points to the existence of significant undiscovered deposits.

Production

Canada is the world’s largest producer of uranium, with about one quarter of total world production. In 2007, Canada produced 9,476 tonnes of uranium valued at approximately $835 million.

Canada’s uranium production grew from about 9,000 tonnes per year in the early 1990s to peak at 12,920 tonnes per year in 1998. Since then, annual uranium production has ranged between 8,214 and 12,552 tonnes.

Uranium is currently mined from the McClean Lake, McArthur River and Rabbit Lake (Eagle Point) mines in northern Saskatchewan. Two additional mines (Cigar Lake and Midwest) are scheduled to begin operations in the near future. With these mines, production capacity should increase to about 16,000 tonnes of uranium annually. There is excellent potential to expand reserves and increase production further.

Canadian Uranium Production and Disposal(in Tonnes)*

Canadian Uranium Production and Disposal(in Tonnes)
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* Note: Production may not equal the sum of exports and domestic use because of changes in inventories held at uranium mills.

Processing

The world’s largest and Canada’s only uranium refinery is located at Blind River, Ontario, where uranium ore concentrates from Canada and abroad are refined to produce uranium trioxide. This product is shipped to a conversion facility in Port Hope, Ontario, which produces one-quarter of the world’s supply of uranium hexafluoride and the world’s only supply of fuel-grade natural uranium dioxide. Uranium hexafluoride is exported to produce enriched uranium fuel for light-water reactors in the United States and elsewhere. Uranium dioxide is shipped to fuel fabrication facilities in Port Hope and Peterborough, Ontario, to produce natural uranium fuel for CANDU reactors in Canada and abroad.

Exports and Domestic Consumption

Approximately 85 per cent of Canada’s uranium yield is exported. In 2007, the value of Canadian-origin uranium exports amounted to approximately $710 million. Exports are chiefly to the United States, the European Union and Japan.

The remaining uranium is used to fuel domestic CANDU reactors, which currently supply about 15% of the electricity used in Canada. Of the 22 CANDU reactors in Canada, 20 are at three separate locations in Ontario, and there is one unit in Quebec and one in New Brunswick.

Prices

Overproduction in the 1970s and early 1980s, and the liquidation of military inventories as well as other uranium stocks, kept uranium prices depressed in the 1990s. In fact, global uranium production has been running at less than 60 per cent of consumption since the fall of the former Soviet Union at the end of 1991. However, these inventories are nearly depleted and uranium prices have risen.

Nearly all the uranium produced in Canada is sold under long-term contracts whose terms are confidential. A small amount of Canada’s uranium is sold on the short-term spot market. On this spot market, the price of triuranium octaoxide (U3O8), the form of uranium commonly traded, hovered around US$10 per pound during the 1990s. The spot price started to rise in 2002, peaking at US$135 per pound of U3O8 at the end of June 2007 and settling at US$89 per pound at the end of December 2007. Prices are expected to remain high as producers continue to struggle to meet demand. This trend will likely continue until additional production capacity is developed in Canada and in the rest of the world.

Uranium Spot Prices
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Outlook

The dramatic increase in the uranium spot-market price has fuelled a strong increase in exploration activity with more than 200 junior mining companies involved, many for the first time. Exploration expenditures, including underground exploration at existing mines, increased from about $30 to 40 million annually in the early 2000s to $213 million in 2006 and to $354 million in 2007.

Outside the Athabasca Basin of Saskatchewan, active uranium exploration programs are also underway in the Northwest Territories, Yukon, Nunavut, Quebec, Newfoundland and Labrador, Ontario, Manitoba, New Brunswick and Alberta. Early indications of success have emerged, but it will take several years for the uranium industry to respond fully to the current supply-demand imbalance. The regulatory process required to approve new mine developments is quite lengthy and as a result, developing an average mine takes from 10 to 15 years.

Increasing support in the political climate for nuclear energy, along with rapid nuclear development in China and India, suggests that the demand for uranium will increase. Significant quantities of Canadian uranium will need to be produced to meet global demand well into the foreseeable future. With its large, high-grade, low-cost uranium resource base and current output, Canada is well positioned to maintain its leadership in uranium