Select Committee on Trade and Industry Written Evidence


Third supplementary memorandum by E.ON UK


  1.  The most authoritative source of information on uranium resources is a joint report by the OECD Nuclear Energy Agency and IAEA, called "Uranium—Resources, production and demand", which is revised every two years. According to the 2003 report[87] about 4.6 million tonnes of uranium (MtU) Conventional Known Resources have been identified worldwide having a recovery cost of less than US$ 130/kgU. It is estimated that there are a further 9.8 MtU Undiscovered Resources, making a total of 14.4 MtU in all (of which at least 11.3 MtU has a recovery cost below 130 US$/kgU).

  2.  These "Known" and "Undiscovered" resources could fuel about 85 and 260 years, respectively, of nuclear electricity generation at current consumption rates, using existing reactor technology. About half of "Conventional Known" uranium resources are located in the countries of the OECD.

  3.  There are additional sources of fuel in prospect, including "Unconventional" uranium sources (mainly in phosphate deposits). These amount to more than 20 MtU and could fuel a further 350 years generation on a similar basis.

  4.  Worldwide expenditure on exploration for uranium is currently low because selling prices have been depressed for a long time; there has only been one exploration cycle (about 1970-85) which identified the sources of current supplies. Little effort has been deployed using modern surveying technology to identify resources which might be used to supply the market beyond the middle of the century.

  5.  There is confidence that the market will be able to meet the anticipated world demand for uranium but beyond 2015 more production facilities will be needed. The spot market price of uranium has increased sharply and is expected to stimulate the necessary new investment and the strengthening market has led to an increase in expenditure on exploration since 2002.

  6.  Nuclear generated electricity costs are relatively insensitive to uranium prices. At the present spot price level in the uranium market of $100/kgU (which is above the average price paid by electric utilities), it would represent only about 5%[88] of the total cost of nuclear electricity generation.

  7.  The development and deployment of breeder reactors and related fuel cycle technology would increase the energy potential of uranium resources for much longer periods. The technology of breeder reactors is under development, notably within the framework of the Generation IV International Forum.

June 2006

87   The 2005 report (which does not significantly alter this picture) is now available through Back

88   Estimated based on a 2006 report by the Australian Uranium Information Centre-a price of $100/kg of Uranium as U3O8, an equilibrium core enrichment with a burn up of 43,000 MW days/tonne, total front and backend fuel cost of 0.3p/kWh, Uranium as U3O8 representing half the total fuel cost at 0.15p/kWh and a total cost of generation of 3p/kWh. Back

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