Australia to Sell Uranium to Ukraine

Uranium prices have been lagging lately, with the U3O8 spot price most recently coming in at $29.15 on UxC. But just because market activity is flat doesn’t mean that countries have given up on their nuclear power ambitions. 
This week, Australia is set to approve the sale of uranium to Ukraine under an agreement that will be signed ahead of a nuclear security summit. The summit will be led by US President Barack Obama in Washington from March 30 to April 2. Australia’s foreign minister, Julie Bishop, has said that the uranium will be used for nuclear power generation.
Uranium market watchers are no doubt aware that Australia does not have its own nuclear industry. However, the country is one of the top uranium-producing nations in the world with 31 percent of the world’s total uranium. As all of Australia’s uranium is exported, the country has steadily been increasing the number of countries cleared to buy its supply for peaceful purposes.

Other countries that have already been cleared include Canada, China, France, India, Japan, South Korea, Russia, Britain and the US. Also of note is that Australia is ranked first according to a global review on the Nuclear Threat Initiative.
Minerals Council of Australia spokesperson Daniel Zavattiero commented, “[a]ccess to growing Ukrainian uranium demand creates opportunities for more tonnes, more exports, and more jobs in mine construction and operations.”

Uranium and Ukraine

As far as Ukraine is concerned, Interfax states that “[t]he annual needs of Ukrainian nuclear power plants for uranium concentrate are about 2,400 tonnes, while its internal production by state enterprise VostGOK in 2015 is planned in the amount of 1,200 tonnes.”
Ukraine is heavily dependent on nuclear energy, with 15 nuclear reactors generating roughly half of its electricity. The Straits Times reported that according to a joint report from the OECD Nuclear Energy Agency and the International Atomic Energy Agency, the country is on track to almost double its nuclear power generation capabilities by 2035.
According to the World Nuclear Association, the country receives a significant amount of its nuclear fuel and fuel services from Russia; that said, it has been reducing its dependence by purchasing fuel from Westinghouse.

Furthermore, earlier in the week, Russian news agency TASS announced that the International Uranium Enrichment Center plans to conclude a contract with Ukrainian partners for the supply of uranium from Ukraine to Russia. However, “the terms of the contract for 2016 for the supply of raw uranium from the Ukraine for its further enrichment at the facilities of IUEC and fuel farbication for the needs of Ukrainian NPPs at the facilities of TVEL company have been completed.”
“Ukraine sends its uranium to Russia for enrichment and the subsequent production of nuclear fuel for its nuclear power plants. The main supplier of fuel for Ukrainian nuclear power plant is Russian TVEL Fuel Company,” TASS states.
 
Securities Disclosure: I, Vivien Diniz, hold no direct investment interest in any company mentioned in this article.