An introduction to uranium

Uranium demand and end-uses

As nuclear energy expands globally, uranium demand is rising at an unprecedented pace.

Uranium is primarily used as fuel in nuclear power generation, with additional applications in defence, medicine, and industry. The increasing push for clean energy, coupled with the expansion of advanced nuclear technologies, is driving unprecedented demand growth.

The dominant driver of uranium demand is nuclear power generation. Currently, there are 436 operational reactors worldwide and 173 under construction, highlighting the growing reliance on nuclear energy. By 2030, uranium demand is projected to increase by 28%, and by 2040, it is expected to nearly double as more nations commit to net-zero emissions and energy security initiatives.

Beyond energy production, the rise of artificial intelligence (AI) and data centres has introduced a new dimension to uranium demand. Major tech companies, including Amazon and Microsoft, are investing in Small Modular Reactors (SMRs) to power their energy-intensive operations. These advanced reactors, capable of delivering 5 GW of continuous power, are expected to play a critical role in the future of energy infrastructure.

Geopolitical factors also shape uranium demand. With Russia controlling 40% of global enrichment capacity, Western nations are working to reduce dependency by investing in domestic uranium processing. The UK and US governments, among others, are increasing funding for domestic enrichment and reprocessing facilities to ensure a stable and independent supply chain.

Uranium has several key end-uses, with nuclear power plants accounting for the vast majority of consumption. In the medical field, uranium is used to produce molybdenum-99, a crucial isotope for cancer diagnostics. In space exploration, NASA’s Kilopower project is developing uranium-fuelled fission systems to power lunar and Martian bases. Additionally, high-temperature gas reactors (HTGRs) are being utilised for industrial applications, generating 950°C process heat for hydrogen production and petrochemical refining.

In the defence sector, uranium remains crucial for nuclear weapons and naval propulsion systems. Depleted uranium (DU) is used in armour-piercing ammunition and radiation shielding, though its share of total uranium demand has decreased to less than 2% as civilian applications continue to expand.

Uranium supply

The uranium supply chain is highly concentrated, with Kazakhstan, Canada, and Australia accounting for nearly two-thirds of global production. While these countries remain key suppliers, the market faces a growing supply-demand imbalance. By 2040, the cumulative uranium supply gap is projected to reach 680,000 metric tonnes, raising concerns about long-term availability.

Supply-side constraints, geopolitical tensions, and technological advancements will shape the market’s future. Addressing these challenges through innovation, investment, and strategic policy shifts is key to ensuring a stable and secure uranium supply chain for decades to come.

Several factors contribute to this potential shortfall. Many high-grade uranium mines remain underutilised or dormant due to past price volatility, and restarting them requires significant investment. Meanwhile, geopolitical risks—such as export restrictions in Russia and production limitations in Kazakhstan—have heightened concerns over supply chain security.

To address these challenges, the uranium industry is adopting innovative approaches in extraction and processing. Orano’s Isoflash denitration process has improved enrichment efficiency by 75%, making the production of high-assay low-enriched uranium (HALEU) more cost-effective. In-Situ Recovery (ISR) mining, now accounting for 57% of global uranium output, reduces water consumption by 90% compared to traditional mining methods, making it a more sustainable alternative. Additionally, recycling initiatives, such as Orano’s La Hague facility, can now reprocess 96% of spent nuclear fuel, significantly reducing waste and improving fuel sustainability.

Despite these advancements, uranium prices reflect ongoing supply constraints. While spot prices have stabilised at $73.75/lb, long-term contracts are increasing by 14% annually, indicating a deepening structural deficit. With SMR deployments projected to add 80 GW of capacity by 2040, uranium’s role in the global energy transition remains critical.

Governments and private investors are diversifying their sourcing strategies to secure long-term supply. Canada, Namibia, and Uzbekistan are ramping up uranium production, while strategic stockpiling efforts aim to mitigate potential disruptions. Additionally, the exploration of alternative fuel cycles, such as thorium-based reactors, offers the possibility of reducing dependency on conventional uranium sources.

Uranium substitution

One of the most promising substitutes for uranium is thorium, a naturally occurring radioactive element with several advantages over traditional uranium-based fuels. Thorium is more abundant in the Earth's crust than uranium and produces less long-lived nuclear waste when used in nuclear reactors. Thorium-based fuel cycles, such as those using liquid fluoride thorium reactors (LFTRs), can operate at higher temperatures and with greater fuel efficiency.

Countries like India, China, and Norway have been investing in thorium research due to their large domestic reserves. However, challenges remain, including the need for technological advancements in thorium reactor designs and the lack of an existing industrial-scale supply chain for thorium fuel.

Another approach to reducing uranium dependence is the use of plutonium derived from reprocessed spent nuclear fuel. In Mixed Oxide (MOX) fuel, plutonium is blended with depleted uranium to create a usable nuclear fuel that reduces reliance on newly mined uranium. France, Japan, and Russia have pioneered MOX fuel use in commercial reactors, promoting a closed nuclear fuel cycle where spent fuel is reprocessed and reused rather than disposed of as waste.

While MOX fuel helps reduce uranium demand and spent fuel stockpiles, it also presents proliferation concerns, as separated plutonium can be repurposed for nuclear weapons. Strict international safeguards are necessary to mitigate these risks.

High-Assay Low-Enriched Uranium (HALEU) for Next-Generation Reactors
Advanced nuclear reactors, including Small Modular Reactors (SMRs) and fast reactors, are shifting towards High-Assay Low-Enriched Uranium (HALEU), which contains a higher concentration of uranium-235 than traditional fuels. HALEU enables higher efficiency, longer fuel cycles, and reduced waste production, potentially reducing the overall demand for uranium.

Efforts to scale up HALEU production, particularly in the United States, Canada, and Europe, aim to lessen reliance on Russian-enriched uranium, which currently dominates the global supply.

Fusion Energy: A Long-Term Alternative
Although still in its experimental stages, nuclear fusion presents a potential long-term alternative to uranium-based fission power. Fusion reactors would primarily use hydrogen isotopes, such as deuterium and tritium, to generate immense amounts of energy without producing high-level radioactive waste.