London (Platts)--26Jul2012/548 am EDT/948 GMT

Uranium resources and production are on the rise with security of uranium supply ensured for the long term, the OECD Nuclear Energy Agency and the International Atomic Energy Agency said in a joint statement Thursday to announce publication of a new report.

Their joint report -- Uranium 2011: Resources, Production and Demand, commonly referred to as the Red Book -- shows that total identified uranium resources have grown 12.5% since 2008. However, the costs of production have also increased, leading to reductions in lower cost category resources.

These figures, which reflect the situation as of January 1, 2011, mean that total identified resources are "sufficient for over 100 years of supply based on current requirements," NEA and IAEA said in their statement.

Global uranium mine production increased by over 25% between 2008 and 2010 because of significantly increased production in Kazakhstan, currently the world's leading producer, they said.
The increased resource base has been achieved thanks to a 22% increase in uranium exploration and mine development expenditures between 2008 and 2010, which in 2010 totaled more than $2 billion, they said.

Demand for uranium is expected to continue to rise for the foreseeable future, they said. Although the Fukushima Daiichi nuclear power plant accident in Japan in March 2011 has affected nuclear power projects and policies in some countries, NEA and IAEA said, nuclear power remains a key part of the global energy mix.

Several governments have plans for new nuclear power plant construction, with the strongest expansion expected in China, India, the Republic of Korea and the Russian Federation, they said.

The "speed and magnitude" of growth in generating capacity elsewhere is "still to be determined," they said.

By 2035, world nuclear electricity generating capacity is projected to grow, they said, from 375 GW at the end of 2010 to between 540 GW in the low demand case and 746 GW in the high demand case, increases of 44% and 99% respectively.

Accordingly, world annual reactor-related uranium requirements are projected to rise from 63,875 mt of uranium metal at the end of 2010 to between 98,000 mtU and 136,000 mtU by 2035, they said.

The currently defined uranium resource base is "more than adequate" to meet high-case requirements through 2035 and "well into the foreseeable future," they said.

--Claire-Louise Isted, claire-louise_isted@platts.com
--Edited by Jeremy Lovell, jeremy_lovell@platts.com

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