In this first of our multi-part bulletin series, we explore the new wave of interest in nuclear energy, how we got here, how uranium mining and exploration are impacted, how Canada is contributing to these developments and discuss where global efforts are headed.

How Did We Get Here?

In 2015, world leaders signed the historic Paris Agreement at the United Nations Climate Change Conference, a commitment to tackle climate change and achieve net zero by 2050. Global efforts are underway to, among other things, decarbonize the existing electricity grid. Additionally, jurisdictions around the world now forecast far greater demand in the future for new clean electrical generation capacity as many sectors, including transportation, manufacturing, agriculture, commercial and even residential look to move away from fossil fuels as a primary source of energy.

Stakeholders are currently evaluating and implementing a variety of energy sources to help the world achieve its goals to reduce carbon emissions. Solar, wind, hydro and other renewable energy sources combined with energy storage are an important part of the solution. So are carbon capture and storage, hydrogen, various efforts focused on energy efficiency and conservation and many other energy related innovations. These alone however are not expected to be sufficient to achieve net zero by 2050.

Another part of the solution which historically played a prominent role is now making its comeback – Nuclear Energy. Not only is nuclear energy clean energy, but as recognized by the World Nuclear Association, it has a superior safety record, can be easily stockpiled in order to secure several years of supply, and offers grid stability regardless of climatic conditions. Many jurisdictions around the world are now looking to nuclear energy as an important source of clean, base load electricity well into the future.

So We Need Nuclear – Who Will Provide It?

According to the International Energy Agency, many countries have been making notable progress in recent years in relation to nuclear energy. For example, in Europe, France has plans to construct six new large nuclear reactors with an option to build eight more, and Finland completed its first new nuclear reactor in 2023. Over in Asia, China completed two large nuclear reactors in 2022, has four more underway and many more planned. Closer to home, interest in nuclear energy in the US has significantly increased in recent years, in part due to a tax credit for the production of zero-emission nuclear power in the Inflation Reduction Act.

In Canada, many new nuclear energy projects have been announced in the past couple of years and are at various stages of development and construction. Once built, these will significantly expand the capacity of electricity generated from nuclear power in Ontario and New Brunswick and introduce nuclear power to the electricity grid in Saskatchewan and Alberta. Projects in other provinces and territories are anticipated too. This is in addition to the refurbishment of existing reactors operated by Bruce Power and Ontario Power Generation underway or planned that will extend the life of these facilities for many decades to come. Commentators attribute some of this increased interest and action to generous investment tax credits announced as part of Canada's federal budget in 2023 that now apply to non-emitting electricity generated from nuclear energy, manufacturing of nuclear energy equipment, processing or recycling of nuclear fuels and manufacturing of nuclear fuel rods.

How Will this Impact Uranium Exploration and Mining Activity?

At present, almost all nuclear power in the world is sourced from mining uranium. With the expectation of significant growth in the number of operating nuclear power plants around the world in the coming decades, there is a growing expectation of increased demand for fuel to supply them. This is leading to increased interest in uranium exploration and mining activities in many jurisdictions around the world.

Canada is blessed with significant uranium deposits, and is in fact, one of the principal sources for uranium for many parts of the world. Canada is the world's second largest producer of uranium, accounting for around 13% of total global output, according to the Government of Canada's Uranium in Canada website (as of 2022).

Canadian uranium exploration and mining companies are playing an important part in this space. Some of these developments include:

  • Cameco Corporation, a global leader in the sector, recently announced plans to increase production and extend the life of its Cigar Lake mine and is looking into expanding production capacity at its McArthur River/Key Lake mine.
  • Denison Mines Corp., another leading Canadian uranium mining and exploration company, recently announced the restart of uranium mining operations at its McClean Lake joint venture with Orano Canada Inc.

Relatedly, recent increased capital markets and mergers and acquisitions activity amongst Canadian uranium exploration companies also includes the following:

  • In December 2023, NexGen Energy Ltd., which owns uranium exploration properties in Saskatchewan, updated its expanded at-the-market equity offering to sell up to C$500 million of common shares from treasury. It owns the Rook I project located in Saskatchewan, the largest development-stage uranium project in Canada.
  • In December 2023, 92 Energy Ltd., an Australian-listed developer of Canadian uranium properties announced its proposed three-way merger acquisition of ATHA Energy Corp. and Latitude Uranium Inc.
  • In December 2023, IsoEnergy Ltd. merged with Consolidated Uranium Inc.
  • In February 2024, IsoEnergy completed a $23 million bought deal private placement. It intends to use the proceeds for exploration of both of its Athabasca Basin Portfolio located in Saskatchewan, and its Quebec properties.
  • In February 2024, Fission Uranium Corporation, announced its own $75 million bought deal offering. It intends to use the proceeds to fund exploration and development of its PLS uranium project based in the Athabasca Basin in Saskatchewan.

Increased uranium mining and ongoing development activity is an essential phase for Canada's energy transition to be successful. Ongoing and increased investment in Canada's uranium mining industry can also have a positive downstream impact on the future expansion and growth of nuclear energy globally.

Beyond Canada, significant existing uranium mining and production is present in Kazakhstan, Australia, Namibia, Uzbekistan, Niger and Russia. Additional promising uranium exploration and development activity is underway in many other jurisdictions including in particular Australia and Namibia.

Stay Tuned

Moving beyond the revival of nuclear energy and the impact on uranium mining and exploration, our next bulletin will explore the challenges surrounding uranium fuel supply. Sign up here to our mailing list if you would like to stay informed.

You may also be interested in attending, virtually or in-person, our upcoming Fasken seminar "A Challenge for the Nascent Nuclear Energy Renaissance: Harnessing the Dynamics at Play in the Uranium Mining and Fuel Supply and Enrichment Sector" on March 4, 2024. For more details, and to register, click here:

https://www.fasken.com/en/faskeninstitute/2024/03/pdac-nuclear-energy-renaissance

Special thanks to Barbara Clark and Adele Ambrose for their help with this article.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.