Uranium – a powerful element in energy transition

Uranium – a naturally occurring radioactive element – is one of the critical ingredients in decarbonizing the energy system and providing energy security. Since 2020, uranium prices have doubled due to a concentrated and insecure supply.

Active equities 17 Apr 2024 12 min read

Dirk Hoozemans

Senior portfolio manager

Key takeaways

Generating nuclear power does not cause carbon emissions. Combined with high capacity of nuclear power plants, it makes nuclear power a reliable and stable source of energy.
Nuclear waste remains the major environmental and safety drawback related to nuclear power.
A few high-profile incidents in the history of nuclear power have led to improved safety designs in reactors.
Uranium needs to be enriched to be used in nuclear power reactors.
Kazakhstan is the world’s biggest producer of uranium, but nearly half of enriched uranium exports worldwide comes from Russia.
Constrained and insecure supply meeting elevated clean energy and energy security demand has driven uranium prices to new highs in recent months.

Uranium price between January 2020 and March 2024 (U308 in USD/pound)

Historical performance indications and financial market scenarios are not reliable indicators of future performance.
Source: Bloomberg. January 2020–March 2024
Note that 1 imperial pound (lb) is equal to 0.45359237 metric kilograms (kg), or 1 kg = 2.2046 lbs.

A chart depicting the price of uranium 308 per pound rising from around USD 25 per pound in January to USD 93.5 in March 2024.

A quick history of uranium

Uranium was discovered in 1789 by the German chemist Martin Heinrich Klaproth and was named after the then-recently discovered planet Uranus. It occurs as a naturally radioactive silvery-white metal and is one of the more common chemical elements in the Earth’s crust. Denoted by the symbol U, it has atomic number 92 in the periodic table of elements, meaning its nucleus contains 92 positively charged protons, orbited by 92 negatively charged electrons.¹

Which uranium isotope is key in generating nuclear energy?

Uranium has three different naturally occurring isotopes: U234, U235 and U238.² The most common isotope is U238, which accounts for over 99% of natural uranium. The important nuclear energy carrier U235 used in power generation makes up for around 0.7% of all uranium, while U234 occurs only in very small quantities.³

Picture 1: Nuclear fission process

Source: US Energy Information Administration (n.d.). Nuclear Explained. Retrieved on 19.03.2024.

An image of the uranium 235 atom being hit by a neutron and then split while releasing radiation and energy.

Splitting atoms to create nuclear power

All nuclear power plants currently in operation are based on the principle of fission. In nuclear fission, a neutron is made to collide with a uranium atom, thereby splitting the atom. This releases both radiation and the energy that holds the atom together in the form of heat. The split also causes more neutrons to be released and bump into more uranium atoms, creating a nuclear chain reaction that generates significant amounts of heat. That heat is then used to fire a steam turbine, generating electricity. Most nuclear reactors use fuels containing U235, which is nature’s most fissile isotope.

Nuclear fuel needs a higher concentration of U235 than found in nature. Hence after mining, uranium needs to be “enriched”: the content of U235 needs to be taken up to 3%–5% (for LEU or low-enriched uranium, fuel for most reactor designs), or as high as 20% (HEU or highly enriched uranium, used in e.g. submarine propulsion).4 Uranium is considered weapons-grade when it has been enriched to 90%.⁵

Enriched uranium has a super-high energy density: one single uranium fuel pellet, the size of a gummy bear, can create the amount of energy of a ton of coal, 149 gallons of oil, or 17,000 cubic feet of natural gas.⁶

Nuclear energy: a clean and reliable force in the net-zero economy

Contrary to traditional fossil-fuel-based electricity generation, nuclear power generation is carbon emissions free and contributes to net zero outcomes^7.8 Also, nuclear power plants operate at high round-the-clock capacity factors, making nuclear power a reliable and stable source of baseload power generation. The major environmental and safety drawback related to nuclear power is nuclear waste, especially used nuclear fuel, which can remain radioactive for many years.

There have been headline-grabbing and serious disasters related to nuclear power plants in the past: the 1979 Three Mile Island partial meltdown,⁹the 1986 Chernobyl accident¹⁰, and the 2011 Fukushima disaster¹¹ caused by a tsunami spring to mind immediately. While these incidents have caused public concern and anxiety around nuclear power, and have led to NIMBY-ism¹² in the past, it should be noted that the track record of nuclear power versus other sources of energy¹³ points to the safety of nuclear energy. Note also that accidents and near-accidents have led to improved safety designs in existing and new reactors.

Total Energy Supply	Total Energy Supply	IEA	IEA	IEA	IEA	IEA	IEA	IEA Stated Energy Policies Scenario STEPS	IEA Stated Energy Policies Scenario STEPS	-	-	-	-	-	-	IEA Announced Pledges Scenario APS	IEA Announced Pledges Scenario APS	-	-	-	-	-	-	IEA Net Zero Emissions Scenario NZE	IEA Net Zero Emissions Scenario NZE	-	-	-	-	-	-
Total Energy Supply	Share of Energy	IEA	2010	IEA	2021	IEA	2022	IEA Stated Energy Policies Scenario STEPS	2030E	-	2035E	-	2040E	-	2050E	IEA Announced Pledges Scenario APS	2030E	-	2035E	-	2040E	-	2050E	IEA Net Zero Emissions Scenario NZE	2030E	-	2035E	-	2040E	-	2050E
Total Energy Supply	Coal	IEA	28%	IEA	27%	IEA	27%	IEA Stated Energy Policies Scenario STEPS	22%	-	19%	-	17%	-	14%	IEA Announced Pledges Scenario APS	20%	-	15%	-	12%	-	7%	IEA Net Zero Emissions Scenario NZE	17%	-	9%	-	5%	-	3%
Total Energy Supply	Gas	IEA	21%	IEA	23%	IEA	23%	IEA Stated Energy Policies Scenario STEPS	22%	-	22%	-	21%	-	20%	IEA Announced Pledges Scenario APS	21%	-	19%	-	17%	-	14%	IEA Net Zero Emissions Scenario NZE	21%	-	14%	-	10%	-	6%
Total Energy Supply	Oil	IEA	32%	IEA	29%	IEA	30%	IEA Stated Energy Policies Scenario STEPS	29%	-	28%	-	27%	-	26%	IEA Announced Pledges Scenario APS	28%	-	25%	-	22%	-	16%	IEA Net Zero Emissions Scenario NZE	26%	-	21%	-	15%	-	8%
Total Energy Supply	Nuclear	IEA	6%	IEA	5%	IEA	5%	IEA Stated Energy Policies Scenario STEPS	6%	-	6%	-	6%	-	7%	IEA Announced Pledges Scenario APS	6%	-	7%	-	9%	-	9%	IEA Net Zero Emissions Scenario NZE	8%	-	10%	-	12%	-	12%
Total Energy Supply	Bioenergy	IEA	5%	IEA	4%	IEA	4%	IEA Stated Energy Policies Scenario STEPS	3%	-	3%	-	3%	-	2%	IEA Announced Pledges Scenario APS	1%	-	1%	-	1%	-	1%	IEA Net Zero Emissions Scenario NZE	0%	-	0%	-	0%	-	0%
Total Energy Supply	Solar	IEA	0%	IEA	1%	IEA	1%	IEA Stated Energy Policies Scenario STEPS	3%	-	5%	-	7%	-	10%	IEA Announced Pledges Scenario APS	4%	-	8%	-	11%	-	17%	IEA Net Zero Emissions Scenario NZE	6%	-	12%	-	18%	-	26%
Total Energy Supply	Wind	IEA	0%	IEA	1%	IEA	1%	IEA Stated Energy Policies Scenario STEPS	3%	-	4%	-	5%	-	6%	IEA Announced Pledges Scenario APS	4%	-	6%	-	7%	-	11%	IEA Net Zero Emissions Scenario NZE	4%	-	8%	-	11%	-	16%
Total Energy Supply	Other renewables	IEA	8%	IEA	9%	IEA	10%	IEA Stated Energy Policies Scenario STEPS	12%	-	13%	-	14%	-	16%	IEA Announced Pledges Scenario APS	15%	-	18%	-	21%	-	25%	IEA Net Zero Emissions Scenario NZE	18%	-	25%	-	28%	-	30%
Total Energy Supply	Other	IEA	0%	IEA	0%	IEA	0%	IEA Stated Energy Policies Scenario STEPS	0%	-	0%	-	0%	-	0%	IEA Announced Pledges Scenario APS	0%	-	0%	-	0%	-	0%	IEA Net Zero Emissions Scenario NZE	0%	-	0%	-	0%	-	0%
Total Energy Supply	Total	IEA	100%	IEA	100%	IEA	100%	IEA Stated Energy Policies Scenario STEPS	100%	-	100%	-	100%	-	100%	IEA Announced Pledges Scenario APS	100%	-	100%	-	100%	-	100%	IEA Net Zero Emissions Scenario NZE	100%	-	100%	-	100%	-	100%

Total Energy Supply	BNEF Green Scenario	-	-	-	BNEF Grey Scenario	-	-	-	BNEF Red Scenario	-	-
Share of Energy	2030E	2035E	2040E	2050E	2030E	2035E	2040E	2050E	2030E	2035E	2040E	2050E
Coal	15%	10%	6%	1%	18%	18%	19%	18%	15%	9%	5%	0%
Gas	21%	15%	11%	4%	23%	24%	24%	26%	20%	14%	10%	3%
Oil	30%	22%	14%	5%	30%	22%	15%	8%	28%	20%	12%	4%
Nuclear	6%	7%	7%	5%	6%	7%	7%	5%	15%	30%	44%	66%
Bioenergy	9%	11%	11%	11%	9%	11%	12%	12%	9%	9%	9%	7%
Solar	5%	9%	12%	18%	4%	5%	7%	9%	3%	5%	5%	6%
Wind	11%	23%	34%	52%	6%	10%	13%	17%	6%	10%	12%	12%
Other renewables	3%	3%	4%	4%	3%	3%	4%	4%	3%	3%	3%	2%
Other	0%	0%	0%	0%	0%	0%	0%	0%	0%	0%	0%	0%
Total	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%

In the International Energy Agency’s (IEA) World Energy Outlook 2023, the role of nuclear energy increases in all three scenarios outlined, whereas in Bloomberg New Energy Finance’s (BNEF) so-called red scenario (economic transition to nuclear energy and nuclear-produced hydrogen), the role of nuclear energy becomes even more significant. The growth outlook for nuclear energy was bolstered in 2023 as the 28th United Nations Conference of Parties (COP28) called for accelerated deployment of nuclear technology.¹⁴

Kazakhstan and Russia – key players in uranium production and enrichment

While uranium is mined in only a few countries globally, enrichment is even more concentrated: there is only a handful of fuel enrichment companies operating in a limited number of countries. Russia makes up only 5% of global uranium production,¹⁵but the country accounts for almost half of the world’s enrichment capacity,¹⁶ mainly supplied from Kazakhstan.

Russia-Ukraine war impacts uranium imports

Prior to passing a bill banning Russian nuclear fuel imports in the wake of the Russia-Ukraine war,¹⁷ the US imported nearly half of its nuclear fuel from Russia.18 Europe relies on Russia for 40% of its nuclear fuel supply. Sanctions on Russia have increased demand for non-Russian nuclear fuel, which has led to increased demand for uranium to be enriched outside of Russia.¹⁹

On top of this, Kazakhstan’s state-owned uranium miner Kazatomprom is experiencing production problems due to shortages in process chemicals,²⁰ and Canadian producer Cameco is also struggling to meet production targets.²¹

Table 2: Uranium supply–demand balance (million pounds)

Primary Supply Forecast	Primary Supply Forecast	2017	2017	2018	2018	2019	2019	2020	2020	2021	2021	2022	2022	2023E	2023E	2024E	2024E	2025E	2025E	2026E	2026E	2027E	2027E	2028E	2028E	2029E	2029E	2030E	2030E
Primary Supply Forecast	Australia	2017	14.0	2018	16.7	2019	16.9	2020	16.1	2021	10.8	2022	11.8	2023E	12.0	2024E	13.3	2025E	13.7	2026E	14.1	2027E	14.1	2028E	14.1	2029E	14.1	2030E	13.1
Primary Supply Forecast	Canada	2017	34.2	2018	18.1	2019	18.0	2020	10.3	2021	12.2	2022	19.5	2023E	28.5	2024E	34.5	2025E	36.9	2026E	36.7	2027E	36.9	2028E	56.6	2029E	67.2	2030E	76.0
Primary Supply Forecast	Kazakhstan	2017	60.6	2018	56.4	2019	59.3	2020	50.6	2021	56.7	2022	56.3	2023E	54.9	2024E	57.0	2025E	66.1	2026E	73.3	2027E	78.5	2028E	80.0	2029E	76.7	2030E	77.3
Primary Supply Forecast	Nambia	2017	11.2	2018	15.2	2019	14.2	2020	14.1	2021	15.0	2022	14.6	2023E	13.7	2024E	14.9	2025E	18.5	2026E	19.7	2027E	19.8	2028E	19.8	2029E	19.8	2030E	19.8
Primary Supply Forecast	Niger	2017	9.0	2018	7.6	2019	7.8	2020	7.8	2021	5.0	2022	5.2	2023E	3.9	2024E	3.9	2025E	5.0	2026E	6.0	2027E	8.0	2028E	7.5	2029E	6.7	2030E	6.1
Primary Supply Forecast	Russia	2017	7.7	2018	7.6	2019	7.0	2020	6.8	2021	6.8	2022	6.5	2023E	6.9	2024E	9.9	2025E	10.9	2026E	11.7	2027E	11.7	2028E	11.7	2029E	11.7	2030E	11.7
Primary Supply Forecast	Other	2017	18.8	2018	19.5	2019	17.9	2020	18.5	2021	17.1	2022	16.7	2023E	12.5	2024E	12.4	2025E	13.3	2026E	14.9	2027E	14.8	2028E	14.4	2029E	14.3	2030E	13.9
Primary Supply Forecast	Primary supply total	2017	155.4	2018	141.1	2019	141.1	2020	124.2	2021	123.6	2022	130.7	2023E	132.4	2024E	146.0	2025E	164.4	2026E	176.3	2027E	183.9	2028E	204.2	2029E	210.5	2030E	217.8
Primary Supply Forecast	Inventory and secondary supply total	2017	30.5	2018	32.4	2019	31.5	2020	28.5	2021	29.4	2022	28.9	2023E	22.6	2024E	21.1	2025E	23.2	2026E	24.2	2027E	22.5	2028E	22.0	2029E	21.6	2030E	23.2
Primary Supply Forecast	Total supply	2017	185.9	2018	173.5	2019	172.5	2020	152.7	2021	153.0	2022	159.6	2023E	155.0	2024E	167.2	2025E	187.6	2026E	200.5	2027E	206.4	2028E	226.1	2029E	232.1	2030E	241.0

Demnad forecast ex buffer Inventories	Demnad forecast ex buffer Inventories	2017	2017	2018	2018	2019	2019	2020	2020	2021	2021	2022	2022	2023E	2023E	2024E	2024E	2025E	2025E	2026E	2026E	2027E	2027E	2028E	2028E	2029E	2029E	2030E	2030E
Demnad forecast ex buffer Inventories	USA and the Americas	2017	54.9	2018	53.4	2019	52.8	2020	48.3	2021	50.7	2022	54.6	2023E	53.2	2024E	52.6	2025E	53.2	2026E	55.3	2027E	54.0	2028E	55.3	2029E	55.4	2030E	57.2
Demnad forecast ex buffer Inventories	Europe	2017	55.4	2018	51.0	2019	53.2	2020	46.7	2021	47.5	2022	48.7	2023E	53.6	2024E	48.9	2025E	48.9	2026E	49.7	2027E	51.6	2028E	51.9	2029E	50.6	2030E	52.1
Demnad forecast ex buffer Inventories	China	2017	25.1	2018	23.0	2019	25.5	2020	22.7	2021	23.1	2022	27.5	2023E	29.8	2024E	35.0	2025E	38.8	2026E	42.0	2027E	48.9	2028E	57.7	2029E	58.6	2030E	59.0
Demnad forecast ex buffer Inventories	India	2017	2.6	2018	2.6	2019	2.6	2020	4.2	2021	5.9	2022	5.2	2023E	5.3	2024E	4.6	2025E	4.6	2026E	7.0	2027E	7.8	2028E	9.5	2029E	8.9	2030E	10.5
Demnad forecast ex buffer Inventories	Japan	2017	1.2	2018	2.2	2019	5.8	2020	4.3	2021	6.5	2022	9.3	2023E	8.1	2024E	8.6	2025E	9.5	2026E	12.4	2027E	9.8	2028E	9.6	2029E	9.6	2030E	9.6
Demnad forecast ex buffer Inventories	Russia	2017	16.5	2018	14.0	2019	14.0	2020	14.2	2021	15.8	2022	13.1	2023E	12.9	2024E	12.7	2025E	12.5	2026E	14.4	2027E	13.5	2028E	15.8	2029E	17.0	2030E	14.4
Demnad forecast ex buffer Inventories	Rest of Asia	2017	12.2	2018	12.7	2019	11.8	2020	11.5	2021	16.2	2022	12.6	2023E	14.1	2024E	12.5	2025E	11.5	2026E	12.3	2027E	14.0	2028E	14.1	2029E	13.0	2030E	13.0
Demnad forecast ex buffer Inventories	Other countries	2017	2.2	2018	2.5	2019	5.8	2020	8.0	2021	7.4	2022	6.2	2023E	5.1	2024E	5.1	2025E	5.1	2026E	6.3	2027E	7.0	2028E	6.0	2029E	12.9	2030E	13.3
Demnad forecast ex buffer Inventories	Reactor Demand subtotal	2017	170.0	2018	161.4	2019	171.6	2020	160.0	2021	173.3	2022	177.3	2023E	182.1	2024E	180.0	2025E	184.1	2026E	199.4	2027E	206.6	2028E	219.9	2029E	226.0	2030E	229.0
Demnad forecast ex buffer Inventories	Financials	2017	0.0	2018	8.4	2019	1.2	2020	-0.3	2021	30.7	2022	21.4	2023E	10.0	2024E	10.0	2025E	10.0	2026E	5.0	2027E	5.0	2028E	0.0	2029E	0.0	2030E	0.0
Demnad forecast ex buffer Inventories	BMO Demand Forecast Excluding Buffer Inventories	2017	170.0	2018	169.8	2019	172.8	2020	159.7	2021	204.0	2022	198.7	2023E	192.1	2024E	190.0	2025E	194.1	2026E	204.4	2027E	211.6	2028E	219.9	2029E	226.0	2030E	229.0
Demnad forecast ex buffer Inventories	Supply/Demand Imbalance	2017	15.9	2018	3.7	2019	-0.2	2020	-7.0	2021	-50.9	2022	-39.1	2023E	-37.1	2024E	-22.8	2025E	-6.5	2026E	-3.9	2027E	-5.2	2028E	6.2	2029E	6.1	2030E	12.0

Another market tightening factor has been financial buying of uranium, especially by Sprott Physical Uranium Trust²², which bought around 20 million pounds of uranium in 2022, and another 4 million in 2023; the trust currently holds approximately 64 million pounds of physical uranium, or about one-third of annual global demand.

Constrained and insecure supply meeting elevated clean energy and energy security demand has driven prices to new highs in recent months.

The future of nuclear energy

Research into nuclear energy is ongoing, especially into nuclear fusion: nuclear energy can also be released in a reaction that combines two atoms to form a larger atom. However, this reaction is much less controllable than a fission reaction.²³

Other advancements are being made in reactor design. Especially the so-called SMRs (small modular reactors) look promising due to their lower projected cost and safety attributes.²⁴ The first SMR design was approved by the US Nuclear Regulatory Commission in 2020,²⁵ with construction planned in the coming years.

¹Britannica (2024). periodic table. link. Accessed on 26.03.2024
²Atoms with the same number of protons but different numbers of neutrons are called isotopes. U234 has 92 protons and 142 neutrons (and its mass number is 92+142=234), whereas U235 and U238 have 143 and 146 neutrons, respectively.
³United States Nuclear Regulatory Commission (2023). Natural uranium. Link. Accessed on 21.03.2024
⁴United States Nuclear Regulatory Commission (2020). Uranium Enrichment. Link. Accessed on 22.03.2024; International Atomic Energy Agency (2023). What is Uranium?. Link. Published on 16.08.2023. Accessed on 28.03.2024
⁵ World Nuclear Association (2022). Uranium Enrichment. Link. Accessed on 20.03.2024
⁶encore energy (n.d.). Nuclear Energy: The Future. Link. Accessed on 28.03.2024; Note that 149 gallons corresponds to ~3.55 barrels or 564 liters of oil, and 17000 cubic feet of gas is equal to ~481 cubic meters.
⁷Credit Suisse (2022). Net Zero Asset Managers Initiative. Link. Published on 22.03.2022. Accessed on 28.03.2024
⁸World Nuclear Association (n.d.). How can nuclear combat climate change. Link. Accessed on 28.03.2024
⁹Office of NUCLEAR ENERGY (2022). 5 Facts to Know About Three Mile Island. Link. Published on 04.05.2022. Accessed on 27.03.2024
¹⁰World Nuclear Association (2022). Chernobyl Accident 1986. Link. Accessed on 28.03.2024
¹¹World Nuclear Association (2023). Fukushima Daiichi Accident. Link. Accessed on 26.03.2024
¹²Britannica (2024). NIMBY. Link. Accessed on 28.03.2024 NIMBY | Meaning, Examples, & Facts | Britannica
¹³Our World in Data (2020). What are the safest and cleanest sources of energy. Retrieved from link on 19.03.2024
¹⁴International Atomic Energy Agency (2023). Nuclear Energy Makes History as Final COP28 Agreement Calls for Faster Deployment. Link. Published on 13.12.2023. Accessed on 26.03.2024
¹⁵World Nuclear Association (2023). Uranium Production Figures, 2013-2022. Link. Accessed on 26.03.2024
¹⁶World Nuclear Association (2022). Uranium Enrichment. Link. Accessed on 22.03.2024
¹⁷CONGRESS.GOV (n.d.). H.R.1042 - Prohibiting Russian Uranium Imports Act. Link. Accessed on 28.03.2024
¹⁸Finnish Institute of International Affairs (2023). Russia and Kazakhstan in the global nuclear sector: From uranium mining to energy diplomacy. Link. Published on 05.10.2023. Accessed on 27.03.2024
¹⁹Bloomberg (2023). The Manhattan Project to Wean the World Off Russian Uranium. Link. Published on 23.08.2023. Accessed on 28.03.2024
²⁰Kazatomprom (2024). KAP expects adjustments to its 2024 Production. Link. Published on 12.01.2024. Accessed on 27.03.2024
²¹ World nuclear news (2024). Cameco looks to increase production as net earnings double. Link. Published on 08.02.2024. Accessed on 26.03.2024
²²Sprott (n.d.) Sprott Physical Uranium Trust. Link. Accessed on 28.03.2024
²³BBC (2022). Breakthrough in nuclear fusion energy announced. Link. Published on 13.12.2022. Accessed on 28.03.2024
²⁴IEA (n.d.) Nuclear Power and Secure Energy Transitions. Link. Accessed on 27.03.2024
²⁵United States Nuclear Regulatory Commission (2022). Licensing Activities for Small Modular Reactors. Link. Accessed on 27.03.2024

S-07/24 NAMT-1326

About the author

Dirk Hoozemans
CFA, Senior portfolio manager, Thematic Equities
Dirk Hoozemans (MA, CFA, ESG CFA), Director, is Lead Portfolio Manager of the Energy Evolution strategy. In 2022, he joined Credit Suisse Asset Management, now part of UBS Group, from Triodos Investment Management, where he was fund manager of a global small- and mid-cap-focused thematic impact strategy and responsible for outlining a new impact-driven investment process, including ESG integration and active ownership policies. Prior to that, Dirk held various portfolio management positions at Robeco Asset Management, including portfolio manager of a global energy strategy. Dirk holds a master’s degree in Econometrics from Tilburg University, The Netherlands, is a CFA charterholder, and has obtained the CFA Institute Certificate in ESG Investing.