Canada sets goal to outperform Kazakhstan as major global uranium producer within five years

Canada intends to finalize a $1.6 billion deal with NexGen Energy, a company developing the Rook One uranium field. NexGen believes that acquiring the field will enable Canada to outperform Kazakhstan in uranium production within five years, The Financial Times reported.

As of the end of 2023, Kazakhstan remained the global leader in uranium production.

According to Lee Currier, CEO of NexGen Energy, this project is capable of making Canada the leader in uranium production once again.

He also revealed that a number of American energy companies are eager to acquire uranium from Rook One. The field is in its final licensing stage and will begin infrastructure development once all licenses and funding are secured.

NexGen estimates that starting operations will cost roughly $1.6 billion. The new facility is projected to produce 30 million pounds of uranium annually, accounting for one-fifth of the current global uranium production.

Meanwhile, Kazakhstan faces significant challenges in scaling up production due to a sulfuric acid shortage essential for uranium processing, as well as geopolitical tensions, according to The Financial Times. Import restrictions on Russian uranium imposed by Western nations, coupled with retaliatory measures by Moscow, further contribute to market uncertainty.

Experts suggest that Western countries may reconsider their uranium sourcing strategies as Kazakhstan increasingly turns to China as its primary buyer.

Cameco, Canada’s largest uranium producer, announced plans to increase production by one-third, targeting 37 million pounds from two fields in Saskatchewan.

According to RBC Capital Markets, Canada’s uranium output could double by 2035 with the combined efforts of Denison Mines, Orano Canada, Paladin Energy and NexGen Energy in developing new fields and expanding capacities.

With global uranium demand surging, fueled by pledges from 31 countries to triple their use of nuclear energy by 2050, Canada anticipates reclaiming its status as the top uranium producer — a position it held before Kazakhstan took the lead.

Canada’s Minister of Energy and Natural Resources, Jonathan Wilkinson, noted that investments in Canada’s uranium industry are at their highest levels in 20 years. Field exploration and evaluation costs rose by 90% to C$232 million in 2022 and by 26% to C$300 million in 2023.

Wilkinson emphasized that Canada not only produces enough uranium to meet its domestic needs but also remains the only G7 nation capable of supplying uranium to its allies. With over 80% of its uranium production already exported, Canada leads in this arena, he added.

Uranium prices peaked in January 2024, surpassing $100 per pound for the first time since 2008. Although prices later fell to $73 per pound, they remain significantly higher than the decade average of $50. Canada was the world’s largest uranium producer until 2008, but a price decline following the 2011 Fukushima disaster caused the country to lose its leading position. In contrast, Kazakhstan increased its production and became the global leader. By 2022, Kazakhstan accounted for 43% of global uranium production (with Kazatomprom contributing 23%), while Canada ranked second (15%) and Namibia third (11%).