Quantitative and Spatial Evaluations of Undiscovered Uranium Resources

in: IAEA, TECDOC 1861, 173-202

Abstract

This study assesses the long-term trends in discovery performance of the world’s uranium industry since its inception in the 1940s. Based on this, it attempts to answer the following key question – is the industry finding enough new metal to meet its future needs? Looking back over the last seven decades (from 1945 to 2016) governments and industry spent a total of $72 billion (in constant US 2017 Dollars) exploring for uranium. To date 11.14 Mt of uranium has been found1 in 1230 primary uranium deposits larger than >200 t U. These are spread across 70 countries around the World. This equates to an average unit discovery cost of $6.49 per kg U. Over half of these deposits were found by government agencies. Analysis shows that there is a strong correlation between the rate of discovery and exploration expenditures, and between expenditures and the uranium price (lagged by one year). At the prevailing low price, the current level of exploration spend is only ~40% of what it was in 2011 and only ~16% of its historic high back in 1978. This has led to a corresponding decline in the discovery rate to around 10 new deposits per year containing a total of 65 kt U. By comparison, the industry produced 62 kt of uranium in 2016. However, the reality is that not all discoveries turn into mines, and for those that do there is a long delay between discovery and development. Furthermore, not all of the uranium that is mined is recovered. As a result, the effective discovery rate is estimated to only be~ 45% of the headline figure. Half of this production will become available within 15-20 years, and the remaining half 30-35 years later. At the current level of exploration activity, the effective discovery rate of mineable metal is estimated to be around 29 kt U per annum. This is not enough to replace current mine production, let alone meet any future growth in demand. The IAEA’s Low / High Case forecast is for uranium demand of 67.0 / 104.7 kt U by 2035. If so, the industry will face a major shortage of new projects to develop. For the industry to be sustainable in the longer term it needs to either get smarter /more efficient in how it explores and develops projects, or it has to spend more on exploration. In practical terms, the effective rate of discovery & development needs to increase by a factor of 2.3 to 3.6x over the next two decades. Alternatively, the uranium price will need to increase from $60/kg at present to $156 or $252/kg U (in constant 2017 US Dollars) by 2035. Given the very long lead time between discovery and development, increased exploration efforts need to start now; otherwise the industry faces a real risk of a supply disruption in the longer term. To avoid this, government and industry need to develop new strategies now.

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BibTeX Reference

@ARTICLE{,
    author = { Royer, Jean-Jacques },
     title = { Quantitative and Spatial Evaluations of Undiscovered Uranium Resources },
   journal = { IAEA },
    volume = { TECDOC 1861, 173-202 },
      year = { 2018 },
  abstract = { This study assesses the long-term trends in discovery performance of the world’s uranium industry since its inception
in the 1940s. Based on this, it attempts to answer the following key question – is the industry finding enough new metal to meet
its future needs? Looking back over the last seven decades (from 1945 to 2016) governments and industry spent a total of $72
billion (in constant US 2017 Dollars) exploring for uranium. To date 11.14 Mt of uranium has been found1
 in 1230 primary
uranium deposits larger than >200 t U. These are spread across 70 countries around the World. This equates to an average unit
discovery cost of $6.49 per kg U. Over half of these deposits were found by government agencies. Analysis shows that there
is a strong correlation between the rate of discovery and exploration expenditures, and between expenditures and the uranium
price (lagged by one year). At the prevailing low price, the current level of exploration spend is only ~40% of what it was in
2011 and only ~16% of its historic high back in 1978. This has led to a corresponding decline in the discovery rate to around
10 new deposits per year containing a total of 65 kt U. By comparison, the industry produced 62 kt of uranium in 2016.
However, the reality is that not all discoveries turn into mines, and for those that do there is a long delay between discovery
and development. Furthermore, not all of the uranium that is mined is recovered. As a result, the effective discovery rate is
estimated to only be~ 45% of the headline figure. Half of this production will become available within 15-20 years, and the
remaining half 30-35 years later. At the current level of exploration activity, the effective discovery rate of mineable metal is
estimated to be around 29 kt U per annum. This is not enough to replace current mine production, let alone meet any future
growth in demand. The IAEA’s Low / High Case forecast is for uranium demand of 67.0 / 104.7 kt U by 2035. If so, the
industry will face a major shortage of new projects to develop. For the industry to be sustainable in the longer term it needs to
either get smarter /more efficient in how it explores and develops projects, or it has to spend more on exploration. In practical
terms, the effective rate of discovery & development needs to increase by a factor of 2.3 to 3.6x over the next two decades.
Alternatively, the uranium price will need to increase from $60/kg at present to $156 or $252/kg U (in constant 2017 US
Dollars) by 2035. Given the very long lead time between discovery and development, increased exploration efforts need to
start now; otherwise the industry faces a real risk of a supply disruption in the longer term. To avoid this, government and
industry need to develop new strategies now. }
}