Uranium bubble of 2007
Encyclopedia
The uranium bubble of 2007 was a period of nearly exponential growth
in the price of natural uranium, starting in 2005 and peaking at roughly 300$/kg (or ~135$/lb) in mid-2007. This coincided with significant rises of stock price of uranium mining and exploration companies. After mid-2007, the price began to fall again and at end 2010 was relatively stable at around 100$/kg.
, Saskatchewan
, which has the largest undeveloped high-grade uranium ore deposits in the world. This created uncertainty about short-term future of the uranium supply.
generation was small, as most power plants have long-term uranium delivery contracts, and the price of natural uranium makes up only a small fraction of their operating cost. However, the sharp fall in prices after mid-2007 caused a lot of new companies focused on exploration and mining to lose their viability and go out of business. Due to increased prospecting, known and inferred reserves of uranium have increased by 15% between 2005 and 2007.
Exponential growth
Exponential growth occurs when the growth rate of a mathematical function is proportional to the function's current value...
in the price of natural uranium, starting in 2005 and peaking at roughly 300$/kg (or ~135$/lb) in mid-2007. This coincided with significant rises of stock price of uranium mining and exploration companies. After mid-2007, the price began to fall again and at end 2010 was relatively stable at around 100$/kg.
Causes
The upward trend for the prices of uranium was already apparent since 2003. This prompted increases in mining activity. A possible direct cause for the bubble is the flooding of the Cigar Lake MineCigar Lake Mine
The Cigar Lake Mine is the largest undeveloped high grade uranium deposit in the world, located in the uranium rich Athabasca Basin of northern Saskatchewan, Canada....
, Saskatchewan
Saskatchewan
Saskatchewan is a prairie province in Canada, which has an area of . Saskatchewan is bordered on the west by Alberta, on the north by the Northwest Territories, on the east by Manitoba, and on the south by the U.S. states of Montana and North Dakota....
, which has the largest undeveloped high-grade uranium ore deposits in the world. This created uncertainty about short-term future of the uranium supply.
Impact
The impact of the bubble on nuclear powerNuclear power
Nuclear power is the use of sustained nuclear fission to generate heat and electricity. Nuclear power plants provide about 6% of the world's energy and 13–14% of the world's electricity, with the U.S., France, and Japan together accounting for about 50% of nuclear generated electricity...
generation was small, as most power plants have long-term uranium delivery contracts, and the price of natural uranium makes up only a small fraction of their operating cost. However, the sharp fall in prices after mid-2007 caused a lot of new companies focused on exploration and mining to lose their viability and go out of business. Due to increased prospecting, known and inferred reserves of uranium have increased by 15% between 2005 and 2007.