So long peak oil, here comes peak uranium

The Physics arXiv Blog writes:

The world's nuclear plants today eat through some 65,000 tons of uranium each year. Of this, the mining industry supplies about 40,000 tons. The rest comes from secondary sources such as civilian and military stockpiles, reprocessed fuel and re-enriched uranium. "But without access to the military stocks, the civilian western uranium stocks will be exhausted by 2013, concludes Dittmar.

Moreover, it's not clear where miners can look for more. So with some countries relying more on nuclear energy than others such as Japan, some may face a shortage as soon as 2013.

However, not every agrees with this bleak picture. The International Atomic Energy Agency and Nuclear Energy Agency say there's enough uranium to power existing plants for 100 years. Although, they admit that "uranium supply shortfalls could develop if production facilities are not implemented in a timely manner." At the end of 2006, world uranium production provided about 60% of world reactor requirements, meaning that about 40% of uranium supplies came from stockpiles and old weapons.

Still, miners, it seems don't have enough incentive. While there have been an explosion in uranium exploration in recent years, uranium prices peaked in 2007, reaching nearly $140. Since then they declined and have hovered between $US40 and $US50 a pound for most of the year.

Rio Tinto's (RTP) uranium subsidiary, Energy Resources of Australia, says low uranium prices and the effects of the financial crisis are hampering global mine development, setting the scene for a uranium shortage further out. Some mines around the world have even been abandoned. Indeed, uranium exploration spending was down 20% in Australia, once a source of production. Instead, Australian firms are looking for gold and uranium in other places, especially in Africa.

It's hard to decipher all the contradicting data, some of which even seems contradictory to basic supply and demand forces. Regardless, the FT has created a vulnerability index for countries relying on nuclear energy in light of the potential shortage. And of course, there are several companies in the sector that could be affected like Cameco (CCJ) and Paladin (PALAF).