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Schodde RC & Trench A, "Next Generation Uranium Supply: A Case of When the Going Gets Tough?", Presentation to the Australian Uranium Conference, Fremantle, July 2009.


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The objective of this presentation was to identify the likely location, size, quality and cost of the next generation of uranium mines. Key observations are:

  • In recent years production has shifted to higher risk countries. Over the next decade only 40% of the world's uranium will come from Australia + Canada + US, with the rest from CIS + Africa + Other Countries
  • On average, the next generation of mines will be of lower quality with the average grade for feasibility and exploration projects 35% and 60% lower than current operations suggesting that prices will need to rise to encourage their development (or more likely, only the higher quality projects will be developed, leaving the rest to wait for another day)
  • Because of their smaller resource size, the next generation of projects will have lower production rates. Current operations average 2020 tonnes per annum U3O8 (rising to 2890 tpa after planned expansions) versus 2070 tpa for projects currently under construction and 1340 tpa for projects at the feasibility-study stage and 980 tpa at the advanced exploration stage. The smaller projects will suffer from dis-economies of scale
  • The cumulative capacity of all of the proposed projects and current operations exceeds current world demand by a factor of 4 times. Clearly, the start-up for many of the projects will need to be deferred until demand grows / existing mines are exhausted.
  • Based on published cost data from 23 recent scoping/feasibility studies, the average capital cost (in 2008$) for the next generation of mines is US$60 to $100 per annual lb of U3O8 production, and site operating costs are typically around $15 30 /lb U3O8. Costs are impacted by the mining technology, head grades and production rates. As a generalisation, in-situ leach projects tend to be at the lower end of the cost spectrum.
  • For a project (be it at the exploration or at feasibility stage) to jump to the front of the development queue it needs to have a capital cost < US$80/annual lb and an operating cost < US$25/lb.

Caution: The above quoted costs are based on data reported by the proponents. In practice, these numbers may be optimistic as they may not have fully captured all of the business costs (marketing and management, as well exploration and rehabilitation) and may not fully recognise the recent escalation in input costs for capital, labour and fuel.

Note: I did the presentation as a representative of the consulting firm CRU Strategies. I regularly assist them on specific assignments in downstream aspects of the mining industry. This includes the assessment of the exploration opportunities for uranium and the development of a cost curve and long run price forecast for uranium.
Further details on CRU's multi-client report (updated annually) can be found at:

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