US and European energy companies are at growing risk from a uranium supply crunch as demand surges for nuclear power to fuel everything from household electricity to data centres, industry figures have warned.
The threat of future shortages comes as the world’s biggest producer of the metal used to power nuclear reactors, Kazakhstan, sells more to Russia and China while less is going to the US and Europe.
“Russian and Chinese players have been very keen to secure access to resources in central Asia and Africa, creating a very aggressive competitive environment,” said Benjamin Godwin at Prism Strategic Intelligence.
“We’re on a depletion curve that I don’t think many customers have realised,” said Cory Kos, vice-president of investor relations at Cameco, one of the world’s largest publicly traded uranium producers and the biggest western supplier based in Canada. The direction of travel “was more flows of material into China”.
Although there was a surplus of uranium following the 2011 Fukushima nuclear disaster, that glut has been gradually worked through, executives said. “As an industry, we’re living off borrowed time . . . inventory that’s running out has kept the supply chain going,” said one former executive.
Energy companies draw their power from a variety of sources, including oil, gas and renewables. However, as the world switches to cleaner energy, analysts expect increasing demand for nuclear power: the World Nuclear Association expects global uranium demand to double by 2040.
A host of nations including the US, UK and South Korea have pledged to triple global nuclear energy capacity by 2050, while technology groups are turning to the fuel for AI data centres.
China and Russia, which border Kazakhstan, are also seeking to substantially expand nuclear power domestically. Kazakhstan supplies about 40 per cent of the world’s mined uranium.
The US Center for Strategic and International Studies (CSIS) warned this month that China and Russia were “rapidly expanding their offtake of mined uranium from international partners”.
It added that there was a “disconnect” between efforts among western governments to secure the uranium supply chain, “including uranium mining”, and plans to expand the use of the fuel.
“Uranium production is a vulnerability that we’re not really paying attention to,” said Gracelin Baskaran, a director of CSIS.
According to company disclosures, roughly two-thirds of sales by Kazakhstan’s state owned mining group Kazatomprom went to buyers domiciled in Russia, China and the home market combined in 2023, compared with about one-third in 2021.
In comparison, only 28 per cent went to US, Canadian, French and UK buyers combined in 2023, down from 60 per cent in 2021. The numbers do not reflect the sales of all Kazakh uranium, some of which is sold by Kazatomprom’s joint venture partners.
Kazatomprom said it intended to keep its “sales diversified . . . our philosophy is not to put all our eggs in one basket”.
It also pointed out that a lower proportion of the company’s uranium went to China than it did before Kazatomprom went public in 2018.
Niger, although only responsible for about 5 per cent of global uranium production, is a major supplier to reactors in the EU. But it reduced supplies to Europe by a third in 2023 compared with 2021, according to data from Euratom.
The country did not export any uranium in 2024 after a military coup in July 2023 led to a government hostile to western mining companies.
French state-owned Orano was stripped of mining rights by Niger’s government last year. In 2023, Niger accounted for 16 per cent of Orano’s uranium resources.
The company is also running out of resources in Kazakhstan, where it has active mines, which are being depleted, according to Teva Meyer, a researcher at France’s Institute of International and Strategic Relations.
“Orano’s room for manoeuvre is very limited in Kazakhstan,” he said. It cannot increase its current output in the country, while other available mines are being bought by the Russians and Chinese, he added.
Orano declined to comment.
Some analysts said US energy groups would need to source more uranium this year. Berenberg analysts said in January that US utilities needed to “contract volumes for the medium term”.
“A supply shock has scope to still materially tighten uranium markets,” they said. “The narrative of a growing supply gap for uranium still rings true.”