Uranium bubble of 2007

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Monthly uranium spot price in USD per pound from 1980 to 2011. The 2007 price peak is clearly visible.[1]

The uranium bubble of 2007 was a period of nearly exponential growth in the price of natural uranium, starting in 2005[2] and peaking at roughly $300/kg (or ~$135/lb) in mid-2007.[3] This coincided with significant rises of stock price of uranium mining and exploration companies.[4] After mid-2007, the price began to fall again and at the end of 2010, was relatively stable at around $100/kg.[5]

Causes[edit]

The upward trend for the prices of uranium was already apparent since 2003. This prompted increases in mining activity. A possible direct cause for the bubble is the flooding of the Cigar Lake Mine, Saskatchewan, which has the largest undeveloped high-grade uranium ore deposits in the world. This created uncertainty about short-term future of the uranium supply.[4] Other factors are speculation triggered by growing expectations around India and China's nuclear programs, and a reduction in available weapons-grade uranium.[6]

Impact[edit]

The impact of the bubble on nuclear power generation was small, as most power plants have long-term uranium delivery contracts,[7] and the price of natural uranium makes up only a small fraction of their operating cost. However, the sharp fall in prices after mid-2007 caused a lot of new companies focused on exploration and mining to lose their viability and go out of business.[4] Due to increased prospecting, known and inferred reserves of uranium have increased by 15% between 2005 and 2007.[8]

See also[edit]

References[edit]

  1. ^ "NUEXCO Exchange Value (Monthly Uranium Spot)". Archived from the original on 2007-12-12. Retrieved 2010-06-30.
  2. ^ Tony Locantro (2005-06-19). "Uranium Bubble & Spec Market Outlook". GoldSeek. Retrieved 2009-11-23.
  3. ^ "Uranium a Bubble?". 2007-02-20. Retrieved 2009-11-23.
  4. ^ a b c Andrew Mickey (2008-08-22). "Uranium Has Bottomed: Two Uranium Bulls to Jump on Now". UraniumSeek.com. Retrieved 2009-11-23.
  5. ^ "Dynamic Charting Tool - 10 year uranium price in US$/kg". InvestmentMine. Retrieved 2009-11-23.
  6. ^ http://www.cfr.org/energy/global-uranium-supply-demand/p14705
  7. ^ "Uranium 101: Markets". Cameco.
  8. ^ "Supply of Uranium". World Nuclear Association. August 2009. Retrieved 2009-11-23.