It has been over six years since the Fukushima nuclear disaster and John Borshoff, the new managing director and CEO of Australian uranium explorer Deep Yellow Ltd., believes the moratorium on nuclear reactor restarts and new builds is coming to an end.
"Fukushima is only a temporary event in terms of the history you see now," he told delegates Sept. 8 at the Africa Down Under conference in Perth, Western Australia.
"Japan even yesterday [said] that [Tokyo Electric Power Co.] is going to get another seven reactors in. All of the sort of resistance is dying. So that fleet will come back to 70% of what it was."
News emerged Sept. 7 that regulators are moving closer to approving the restart of the utility's seven reactors at its Kashiwazaki-Kariwa facility that were among the 50 shut down after the 2011 Fukushima disaster.
Borshoff argued that current demand for uranium is just as strong as it was prior to the disaster, which forced the price of the commodity to historic lows of around US$20 per pound from over US$70 per pound.
"The supply industry is unquestionably suffering from the impact of the Fukushima tsunami and the deteriorating uranium prices this has caused," he said.
"Even though most uranium mines are currently losing money, the supply sector is generally in big trouble. Use of nuclear energy for electrification remains as strong as ever with new and planned reactor builds maintaining strength."
In February 2011, there were 443 nuclear reactors in operation, 62 under construction, 156 planned and 322 proposed.
By comparison, figures from August this year show there are 447 operable reactors, 58 under construction, 162 planned and 349 proposed.
"Uranium companies from majors to juniors have been severely retracted, exited or are seriously thinking about leaving the business," Borshoff said. "This raises the question then as to who in fact will or can build the new production capacity that will be needed?"
A severe supply deficit is expected to begin around 2022, when long-term contracts will no longer be able to be filled.
Borshoff estimates there will be a shortfall of about 80 million to 120 million pounds of uranium each year, which will drive the price much higher than the normal incentive price of around US$70 per pound.