Market Basics » Uranium


Uranium is a silvery-white metallic chemical element in the actinide series of the periodic table with atomic number 92. It is assigned the chemical symbol U. It is the one of the most powerful natural energy sources known to man.

It is a naturally occurring metallic element that possesses an unstable atomic nucleus which, in becoming stable, releases energy in the form of radiation. Radiation can be harnessed to produce other forms of energy, such as heat. In nuclear power stations, this heat is used to produce steam, which drives conventional turbine generators to generate electricity.

Nuclear energy offers a clean, stable source of energy for heat, light and power.

Trading unit

Imperial pounds denominated in U.S. dollars and cents.



Pricing mechanisms

Spot Market (Less than 6 month delivery), Futures Contracts and long-term contracts (3-5 years).

Units for delivery

250 lbs. per contract quoted in U.S. dollars and cents. The final settlement price is the spot-month end price published by UxC.

Avenues of trade

A uranium futures contract is available for trading on CME Globex and clearing on NYMEX ClearPort. Nufcor Uranium Limited [LSE:NU] (previously South Africa's Nuclear Fuels Corporation which was owned by members of the Chamber of Mines of South Africa) is a dominant uranium trader in the western world.

The global trading of uranium has evolved into two distinct marketplaces shaped by historical and political forces. The first, the western world marketplace comprises the Americas, Western Europe and Australia. A separate marketplace comprises countries within the former Soviet Union, or the Commonwealth of Independent States (CIS), Eastern Europe and China. Most of the fuel requirements for nuclear power plants in the CIS are supplied from the CIS's own stockpiles. Often producers within the CIS also supply uranium and fuel products to the western world, increasing competition.

The uranium 'spot' market is an informal concept used to capture all agreements where deliveries are effected within a six-month forward period.

Historically, more than 75% of all Uranium sold has been sold under multi-year contracts with deliveries normally beginning one to three years after the date of contract award. Long-term market contract terms range from two to more than ten years, but typically run from three to five years.

Loans of uranium inventories involve the transfer of title to the relevant uranium from the lender to the borrower. Repayment of such loans is made by the re-transfer of title to an equivalent amount of uranium to that originally borrowed. The terms and conditions of loans of uranium are likely to be influenced by considerations of counter-party credit worthiness, credit concentration issues, the need for appropriate security and by the ability to implement other risk mitigation measures.


Historically, uranium was extracted from both open pit and from underground mines. Alternative techniques include in-situ leach mining in which weak acid or alkaline solutions are pumped into the underground deposits to dissolve uranium.

Mined ore is milled and the uranium is extracted through a multi-stage metallurgical process which separates the uranium from the waste rock. The resulting uranium-rich slurries are then calcined to produce U3O8. U3O8 is a powder which contains approximately 90% uranium oxide. It is commonly referred to as "yellowcake".

Uranium deposits in sedimentary rock: Uranium deposits in sedimentary rocks include those in sandstone (in Canada and the western US), Precambrian unconformities (in Canada), phosphate, Precambrian quartz-pebble conglomerate, collapse breccia pipes (see Arizona Breccia Pipe Uranium Mineralization), and calcrete.

Sandstone uranium deposits are generally of two types. Roll-front type deposits occur at the boundary between the up dip and oxidized part of a sandstone body and the deeper down dip reduced part of a sandstone body. Peneconcordant sandstone uranium deposits, also called Colorado Plateau-type deposits, most often occur within generally oxidized sandstone bodies, often in localized reduced zones, such as in association with carbonized wood in the sandstone.

Precambrian quartz-pebble conglomerate-type uranium deposits occur only in rocks older than two billion years old. The conglomerates also contain pyrite. These deposits have been mined in the Blind River-Elliot Lake district of Ontario, Canada, and from the gold-bearing Witwatersrand conglomerates of South Africa.

Igneous or hydrothermal uranium deposits: Hydrothermal uranium deposits encompass the vein-type uranium ores. Igneous deposits include nepheline syenite intrusives at Ilimaussaq, Greenland; the disseminated uranium deposit at Rossing, Namibia; and uranium-bearing pegmatites. Disseminated deposits are also found in the states of Washington and Alaska in the US.


The only significant commercial use for uranium is to fuel nuclear reactors for the generation of electricity. Through the process of nuclear fission, U235 can undergo a nuclear reaction whereby its nucleus is split into smaller particles. Nuclear fission releases significant amounts of energy and is the basis of power generation in the nuclear industry.

There are 440 reactors operating worldwide, and a total of 69 new reactors that are under construction or planned for completion within the next 10 years (as of January 2006).

The nuclear fuel cycle comprises the following activities: Uranium mining and calcining, conversion, enrichment, fuel production, power generation and spent fuel management.

Most nuclear power reactors require uranium with U235 concentrations of between 3% and 5%. In order to increase the concentration of U235, U3O8 is first subjected to a chemical conversion process to produce uranium hexafluoride ("UF6").

U3O8 is stored at licensed storage facilities. There are four main storage facilities, namely Cameco (Canada), ConverDyn (US), Comurhex (France) and Rosatom (Russia). At the end of 2005 they had combined capacity to convert approximately 178 million lbs of U3O8 per year. Conversion involves a series of chemical processes that purify the U3O8 and convert it into UF6.

The U3O8 is normally shipped to a storage facility in steel drums in ISO sea containers and is stored on site until it is processed. Once it arrives at the storage facility, U3O8 is pooled with existing inventories held at the facility and is regarded as a fungible material. The owner of the U3O8has its account credited with the amount of material delivered. The U3O8may then be transferred to other account holders via a book transfer mechanism. Transfers of material between facilities may occur by means of a similar mechanism. This reduces the need for physical shipment of the U3O8.

Once converted, UF6 is transported in steel cylinders to an enricher. The four main enrichers are France's Eurodif S.A., the United States Enrichment Corporation ("USEC"), Russia's Rosatom and Urenco (a joint venture between the UK, German and Dutch governments). During the enrichment process, the concentration of the U235 isotope in the UF6 is normally increased from 0.7% to between 3% and 5%. The resultant enriched UF6 is known as Low Enriched Uranium ("LEU"). Enrichment is performed by either a gaseous diffusion or a gas centrifuge process.

Extraction, Processing, Refining & Supply Chain

The ore body containing uranium is loosened from surrounding rock by blasting with explosives. After each blast, shovels load the ore-bearing rock into haul trucks or onto conveyers, which deliver the ore to primary crushers.

The ore passes through another three crushing stages, further reducing its size to the consistency of fine sand in the rod mills. Sulphuric acid is used as a leaching agent to dissolve uranium out of the rock. Manganese and iron oxide are added to oxidise the uranium to a soluble state in order to improve the extraction of uranium from the rock. Rotoscoops and thickeners separate the solution from the ground rock, with solid waste material being pumped into tailings dams for disposal.

The first stage in the recovery of uranium from the solution is the continuous ion exchange process. Here, the solution comes into contact with specially formulated resin beads where the uranium is absorbed into the resin and is preferentially extracted from the solution. An acid wash strips uranium from the beads. The uranium-rich solution is pumped into a solvent extraction plant where it is further concentrated and remaining impurities removed. Gaseous ammonia is then added to the uranium solution, causing a precipitate called yellow cake to form. Yellow cake is dried and roasted at temperatures in excess of 600°C to produce the final product of the process: uranium oxide in powder form.

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