Mining business group markets

Growing supply and demand

Demand for the world's reactors stood at around 66,000 metric tons of uranium in 2009 ("gross" demand given as an equivalent of natural uranium). This demand has experienced a slight increase over the past 5 years, between 0.5 and 1% per year, mainly due to a number of new reactors and the increase in power of a growing number of existing reactors.

Global production was slightly up in 2009, achieving around 50,000 metric tons (compared with 43,000 metric tons in 2008).

In 2009, AREVA represented 17% of total uranium production, placing it first worldwide.

Global production continues to cover a little under two-thirds of uranium consumption, the remainder being converted from secondary resources:

• Withdrawal of certain electricity companies or manufacturers in the fuel cycle
• Material taken from HEU dilution (highly enriched uranium from dismantling)
• The use of MOX fuels
• Uranium processing

The depletion of excess uranium stocks, particularly those from electricity companies, and of uranium stocks held in Russia, will lead to an increase in primary production’s supply share.

This production increase will mainly be carried out through new mining projects, compensating for reduced production and closures planned post-2010. A number of these new projects are being conducted by AREVA:

• Imouraren in Niger
• Trekkopje in Namibia
• Bakouma in the Central African Republic
• Katco in Kazakhstan

AREVA is also participating in the Cigar Lake project in Canada, which is being operated by Cameco.

A conditioned price for market imbalances

In 2007, the spot price* of uranium increased sharply, peaking at 135 dollars per pound in June. Three factors explain this tension in the prices:

• The need to see primary production make a sustainable comeback as the main source in the supply
• Regular purchasing of investment funds
• The announcement of production delays (Cigar Lake, Midwest)

*Price fixed for an immediate transaction

This price has since fallen several times. In spite of a brief upturn during summer 2008, it then dropped to 40 dollars per pound at the end of March 2009. This reduction indicates a market imbalance, with:

• a slight increase in primary production compared to secondary resources which are still on the market,
• staggered commercial demand owing to the economic crisis.

The long-term price stabilized in late 2008/early 2009, at 70 dollars per pound.