A Nuclear Renaissance Means More Competition For Uranium

A worldwide nuclear renaissance led by Japan, some countries in Europe (despite German obfuscation), and hopefully the USA, is changing the international uranium market. Uranium producers across the world are forecasting a long-term embrace of nuclear power driving up demand for Uranium and are adjusting accordingly. These producers are not content to just quickly cash in from an ephemeral price spike driven by the energy crisis, they are increasing production. This is not only an instance of market-driven competition creating lower prices, but an attempt to induce demand for uranium and nuclear power by ensuring uranium remains cheap enough to ensure nuclear power is economically viable.

While the expansion of nuclear power and a stable uranium supply is positive for the economy and environment, it also brings with it new challenges. Policymakers must treat uranium (and rare earth minerals) as strategic assets likely to be objects of geopolitical contention the same way oil is. This surge in uranium production is a challenge and opportunity for the West that will require foreign policy and international security acumen.

Western leaders must capitalize on this opportunity to disentangle from the Russian and Chinese-dominated uranium conversion and enrichment supply chains. Russia currently operates reactors in 11 foreign countries, with plans for expansion in markets across Central and Eastern Europe, the Middle East, and Latin America. Russia has even managed to convince Hungary to build two Russian nuclear reactors after the invasion of Ukraine began for the sole purpose of reinforcing Victor Orban’s welfare-centric energy policies. China has tentative plans for 30 overseas nuclear reactors as a part of its Belt and Road Initiative.

Russian and Chinese inroads into nuclear power competition are not just in building reactors overseas. Currently, they collectively control 57% of world enrichment capability and 63% of world uranium conversion capability, with both statistics forecast to climb by 2030 if nothing is done. Even unwilling state actors cannot escape Russia’s nuclear leverage. The Kremlin continues to leverage its civilian nuclear ties with more than 50 countries, including nominally hostile European state actors, reaping political and financial rewards.

Diversifying international uranium suppliers for Western nuclear reactors is the best way to undermine Sino-Russian nuclear endeavors. In this, there are reasons to be optimistic. Canada and Australia are two large Uranium producerswhich can provide a secure baseload for nuclear power expansion while other arrangements are made. This is good, but not enough.

The West must deepen cooperation with and invest in the production capabilities of Uranium-rich actors. Namibia, an African country with extensive Uranium supplies, is at the forefront of this emerging uranium-centric geopolitical competition. Australian mine company Paladin is expanding its facilities. A proposed Russian mine and the budding expansion of the already operating Husab mine, run by a Chinese state-owned enterprise, showcase the rivalry. These moves by Russia and China signal that Namibia is worth engaging with.

Its representative system of government and deep ties with the West make it a winnable frontier in this new global power struggle for economic resources. The West should support Namibia’s fragile democracy, encourage its continued market orientation, and ensure that China and Russia don’t gain ground here.

In low-state-capacity countries such as uranium-rich Niger, this struggle may occur in a turbulent environment and necessitate further assistance to ensure a stable uranium supply. Niger provides the West with an example of what Uranium-centric struggles may look like in the future through its turbulent history and cooperation with France and companies such as Orano.

The lessons drawn from Niger are a multitude: Uranium doesn’t guarantee prosperity, pollution strategies require localization, unstable governments don’t necessarily cooperate with rogue actors, and monitoring uranium at its source is vital for nuclear non-proliferation. All these lessons highlight the feasibility and benefits of ensuring a stable uranium supply even in a low-security environment.

While Namibia and Niger are the frontiers in this struggle, Kazakhstan remains the great prize to be won. Kazakhstan is the world’s largest producer of Uranium and its geographic position between Russia and China makes it vital to Sino-Russian nuclear strategy. Nevertheless, this geographic position does not make Kazakhstan an unfeasible partner for the West. Russia and Kazakhstan’s very public falling out and China’s not-so-subtle recent signal to Russia to not interfere in Kazakhstan suggest discord and a strategic opening for the West.

The Kazakhs themselves are moving towards this strategic opening. The country’s national operator of uranium products Kazatomprom plans to expand production, conduct further IPOs, and export uranium while bypassing Russia via the Caspian Sea.

It is also actively working to dispel fears of future political crises constricting the supply of uranium and keeping prices low. Kazakhstan’s recent political reforms, conscious disentanglement from Russia, compliance with Western sanctions, and success in controlling Russian capital point toward its value as a partner of the U.S. and the West.

Kazakhstan can’t choose its neighbors, but it can choose its partners and the West should respect their choice by deepening cooperation and purchasing more Kazakh uranium while developing more local production capacity.

Ensuring the global availability of affordable uranium is a prerequisite for nuclear power, decarbonization, and combating global warming. If the West falters in this challenge, we can not only expect a demonstrably worse environment, but we can also expect the current woes of Europe relying on Russian gas and Chinese rare earth minerals to be repeated in a few years with uranium. The prices we pay for relying on hostile authoritarian actors for our energy requirements have been repeatedly laid bare and dwarf what is required for a uranium-conscious foreign and energy policy.