Orano Mining
Corporate Social Responsibility
Report 2017
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Uranium market in 2017


In an unfavorable market context, Orano Mining's objective is to continue to optimize the competitiveness of existing sites, and to maintain its project portfolio by conducting the necessary studies so as to be in a position to launch new investments to renew and extend production for the years to come.

In this way, Orano Mining aims to consolidate its position on the uranium market while remaining one of the most competitive producers.


Market and competitive position

Reactor demand stood at around 74,600 tU in 2017 (source: UxC Q1 2018), slightly up (+4%) from 2016, led in particular by demand in Asia.

Supply worldwide consists of:

  • mining production, which amounted to approximately 59,200 metric tons of uranium, down 6% compared with 2016: since 2016, and in response to falling market indicators, the main producers (Orano, Cameco and KazaAtomProm) have announced closures, mothballing of mines and reductions in production.
  • secondary resources estimated to a total of 19,720 metric tons of uranium, according to UxC, coming from materials from used fuel recycling, marketing of uranium inventories of the US (DOE) and Russian governments, re-enriched depleted uranium, and low-enriched uranium.
In 2017...

8,031 metric tons of uranium
(Orano equity share corresponding to 10,078 metric tons of financially consolidated share).

NB: 1 metric ton of natural uranium ~ 2,599 pounds of U3O8.

Uranium Market

The average spot market price - which covers about 10-15% of uranium supplies - stood at $21.6 per pound in 2017. At the end of 2017, the spot rose slightly to $23.8 per pound following various announcements on reductions in uranium production. The long-term indicator stabilized around $30 per pound.

Over the long term, according to the WNA (World Nuclear Association), the market is still forecast to grow, with demand by 2025 predicted to be 25% higher than in 2015. The key drivers for this are the restarting of Japanese reactors and growth in requirement for the Chinese reactor fleet. Rising demand is expected to raise market prices and enable new projects to be launched.

Orano Production in 2017

Backlog

The Orano Mining backlog is diversified among customers in the different uranium-consuming regions.

The uranium sold originates either from the mining resources of companies in which Orano Mining has an equity interest or from uranium bought on the market.


Production of mining sites

Through effective control over its production costs and its level of capital expenditure, the Mining business turned in good operating and financial performance in 2017, despite the persistence of low prices.

  • Somaïr produced 2,116 metric tons of uranium (on a 100% basis), for an Orano share of 63.4 %;
  • Cominak produced 1,332 metric tons of uranium (on a 100% basis), for an Orano share of 34 %;
  • KATCO produced 3,519 metric tons of uranium (on a 100% basis), for an Orano share of 51 %;
  • McArthur River/Key Lake produced 6,202 metric tons of uranium (on a 100% basis), for an Orano share of 30.2 %;
  • Cigar Lake produced 6,925 metric tons of uranium (on a 100% basis), for an Orano share of 37.1 %.

1 Type of operation: ISR In-Situ Recovery, OP: Open-Pit, UG: Underground, n.d.: not defined.

2 Cominak has been consolidated under the equity method since January 1, 2014. Source: Orano.