25.05.202216:08 Forex Analysis & Reviews: The West desperately needs investments in uranium mining

The European Union, the United States, and their allies in the Asia-Pacific region have been conducting a crusade against Russia for three months. Energy was not the first target of sanctions, but now it has taken first place on the agenda.

While sanctions against Russian oil and gas have taken the first place in the headlines - over the security of uranium supplies.

Russia is also a major player in nuclear energy, which is a cause for concern.

The World Nuclear Association claims that Russia supplies more than a third of the world's uranium and has the largest facilities in the world. China ranks second in terms of capacity.

However, according to a recent report by the Center for Global Energy Policy at Columbia University, as of 2018, Russia's share in the world's uranium enrichment capacity was 46 percent. And this can become a problem if the countries in which there are nuclear reactors of Russian technology begin to prepare now.

Preparation would come down to accelerating uranium enrichment elsewhere. France, China, the USA, and Canada have significant enrichment capacities, which they underutilize.

Russian VVER reactors can run on non-Russian fuel, the closest analog of which is produced by the American Westinghouse. A consultant to the Bulgarian government on nuclear energy recently stated that Russian nuclear fuel is being successfully replaced at the Czech Temelin power plant and the Bulgarian Kozloduy.

Maintenance of power plants may become a problem if sanctions affect the Russian nuclear power industry because Russian-made VVER reactors can only be serviced by Rosatom employees. In Europe,

replacement of equipment during repairs has alternatives at the expense of other countries with a developed nuclear industry, including France and the Czech Republic.

Nevertheless, according to some experts, sanctions against the Russian nuclear power industry may not come into force in the near future. And this is because, although Russia is not among the largest uranium producers, it is one of the largest exporters of enriched uranium.

According to a report recently published in the Bulletin of Atomic Scientists, in 2019, Russia exported $ 13 billion worth of mineral fuel, including uranium and enriched nuclear fuel. In 2020, Russian uranium accounted for 16 percent of the uranium purchased by US power plants. In Europe, this percentage was even higher - 20 percent. The problem is that there are very few alternative suppliers.

On the other hand, these few uranium suppliers are large enough to step in and replace Russian uranium. Swedish Vattenfall, for example, stopped purchasing Russian nuclear fuel on February 24. The energy company buys uranium in places like Kazakhstan, Namibia, Canada, and Australia - all of them are large producers, and it only needs to process and enrich it somewhere, which China, for example, can help with.

In the US, some are calling for an increase in local refining and enrichment capacity to reduce the country's dependence on Russian fuel, but it will cost about $ 1 billion.