Once an unpopular commodity, global uranium demand is growing higher – this is evident in its rising stock values. Last month Rick Rule, the famous mining investor and speculator, said he planned on putting money into several uranium mining projects around the world, including in Africa. This correlates with the growing popularity of nuclear energy.

Currently, uranium production is falling short of this high demand, causing miners to double down on exploration and production. Even Namibia, a top uranium producer, has several new uranium mining projects in the pipeline awaiting approval, in order to meet demands and spurred by the rise in uranium costs.

Used primarily for generating electric power, uranium has evolved into one of the world’s key metals. Found far more in the Earth’s crust than the ocean, it is an abundant metal, with more deposits across the globe than mercury, gold, or silver and about as equally abundant as tin.

What makes Africa a desirable target for uranium investors?

Africa is rich in mineral and metal reserves, and this includes uranium deposits. The continent boasts some of the largest deposits of the heavy metal in the world.

According to the World Nuclear Association, in 2021 Namibia was the third biggest producer of uranium in the world that year after Canada and the globe’s number one producer, Kazakhstan, which accounted for 45% of the globe’s uranium yield from mines.

Other African countries also among the world’s largest uranium producers in 2021 were Niger (the 6th-largest producer), South Africa (11th-largest), and Malawi (20th-largest).

In addition to being the third-largest producer of uranium in 2021, Namibia also had two of the top five mines that produced the most uranium that year. The Husab open-pit mine owned by Swakop Uranium (CGN) was the third-biggest producer with a 3,309-tonne output (7% of the total global uranium production for the year), while Rio Tinto’s open-pit mine Rössing in Namibia yielded 2,444 tonnes (5% of the world’s uranium output for the year).

the sudden higher global demand for uranium

Nuclear energy and uranium are suddenly back in the news, unexpectedly to many. Uranium experienced consistent growth in the last two years, one of the very few commodities that thrived during that period in the face of the Covid-19 pandemic, and continues to see steady gains. Experts predict that its value will keep rising during 2022.

The demand for uranium is due to the rising demand for nuclear energy generation around the world with the heightened popularity of nuclear energy as a power source option.

Thirty countries in Africa are even considering developing nuclear power plants.

Why has nuclear energy become more attractive?

Global warming is currently at severe levels and there is a general awareness, boosted by the statements of world leaders and scientific experts, that we are reaching the point of no return. Continued rising temperatures would spell disaster for the planet, so cutting down on carbon emissions is a bigger priority than ever. However, the globe still relies heavily on fossil fuels, some of the most notorious sources of greenhouse gases – and so carbon emissions – when burnt, for electricity and powering transport.

This is where nuclear energy comes in. We all know renewable energy sources are far more environmentally-friendly than fossil fuels, but nuclear fuel is rarely thought of as ‘green’. However, like solar and wind power, nuclear energy produces zero greenhouse gases.

Nuclear energy could also decrease our dependence on carbon-based fuels. Replacing fossil fuels with nuclear fuel would therefore lower the number of sources of carbon emissions.

What’s more, the fact that nuclear fuel contains far more energy than a similar mass of hydrocarbons or coal means employing more nuclear energy could decrease our dependence on carbon-based energy sources. This makes it a great alternative to fossil fuels.

Lingering uncertainty around nuclear energy

Nuclear energy does of course have both advantages and disadvantages to it, and had long been unpopular as a fuel source – and there is still public concern surrounding it. This is not surprising, due to its history with past uranium mining issues and nuclear catastrophes like Chernobyl and Fukushima which have given it a bad rap, with nuclear power stations and reactors viewed as dangerous.

However, as technology and engineering advance, these facilities are becoming safer to operate and will hopefully continue to do so.

Time will tell if nuclear power becomes part of the regular global energy portfolio.

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According to PwC’s recent Mine 2022 report, the net profit for the top 40 mining companies has increased approximately 127%, with their market capitalization increasing about 7%. Mining investment is absolutely crucial for the green transition, as the top 40 miners will lead the way in critical metals exploration and mining. This will help the world stay on track with net zero 2050 goals in the long run and adhere to the Paris Agreement.