London, 23 September 2009 

CRU Group, the leading metals and mining consultancy firm, forecasts a major escalation in uranium mining costs towards $60/lb for the ‘next generation’ of projects required to meet demand projections over the next two decades. 

In its new report,1 “Next generation uranium – at what cost?” CRU examines the operating and capital costs of U3O82 production at more than 70 mines and projects worldwide, representing nearly 100% of primary supply. 

Over the next two decades, CRU believes that mine production needs to double to meet forecast demand.3  Supply from secondary sources will decline, and many existing uranium mines are expected to reach the end of their life.  An increasing number of new, next generation projects will be required to replace them.

Alison Parums, Senior Consultant at CRU, commented that, “The next generation of uranium projects will have significantly higher costs than the mines that are currently in operation.  By 2030, miners will need a uranium price of US$58/lb (in real 2009 dollars) to justify bringing these new projects on stream.” 

However, despite a surge in exploration activity over the past few years (CRU estimates that more than 3,000 projects are under development globally), project quality is declining: CRU calculates that the average grade of projects at the feasibility study stage is 35% lower than the grades of current mines.  Exploration projects have average grades 60% below existing operations.  As a result of these lower grades, and/or location in higher-cost geographical regions, next generation projects will have higher operating costs, on average, than current producers.

“The uranium spot price has averaged just $33/lb since the turn of the millennium, and is currently about $46/lb,” added Parums.  “So it’s clear that there will need to be a significant long term increase in prices to enable the development of new mine capacity.”

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For more information contact: UraniumAlison Parums, Senior Consultant, CRU Group

Tel: + 44 20 7 903 2311    Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it