The global geopolitics of nuclear fuel

This fall, uranium prices set a record high — $96.50 per pound. But even though the radioactive metal is critical to the nuclear power buildout, rising prices haven’t triggered panic among uranium buyers. So how are buyers continuing to rely on the supply chain to keep delivering? In this episode, Shayle speaks with Mike Alkin, founder and chief investment officer at Sachem Cove Partners, to unpack the full nuclear fuel cycle: from mining and yellowcake to conversion, enrichment, and fabrication. Mike explains why uranium mining, specifically, is the ultimate bottleneck in the supply chain. He also makes the case that murky contracting masks the market reality, and breaks down what could happen when America’s 2028 ban on Russian enriched uranium goes into full effect. Shayle and Mike also discuss: - Uranium’s global supply/demand mismatch - Why buyers have been replacing fuel at just above 50% of its burn rate - Why production costs at the world's lowest-cost producer, Kazatomprom, have skyrocketed and triggered global production curtailments. - Why shifting toward overfeeding will create massive new demand for uranium yellowcake - The challenges America faces finding new uranium suppliers - Catalyst: Building a domestic nuclear fuel supply chain - Catalyst: The state and future of nuclear waste - Catalyst: The path to market for new nuclear reactors - Open Circuit: Inside Meta’s massive nuclear push - Latitude Media: The Department of Energy's 2026 playbook Credits: Hosted by Shayle Kann. Produced and edited by Max Savage Levenson. Original music and engineering by Sean Marquand. Stephen Lacey is our executive editor. Catalyst is brought to you by Antenna Group, the strategic communications and marketing partner behind the biggest names in energy, climate, and infrastructure. For three decades, Antenna has helped breakout companies amplify their stories, build reputation, differentiate from the competition, define new categories and accelerate growth. Learn more at antennagroup.com. Catalyst is brought to you by EnergyHub. Peak season puts every grid to the test — and the utilities that pass are the ones that built flexible capacity before they needed it. EnergyHub works with more than 230 utilities to coordinate over 2.6 million DERs and more than 3.6 gigawatts of dispatchable flexibility through a single platform designed to perform when it counts most. See what that looks like at EnergyHub.com. Catalyst is brought to you by GridBeyond. GridBeyond is the world’s leading technology platform for managing distributed and flexible energy resources. Learn more by visiting ⁠GridBeyond.com⁠.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Speaker 00

  Latitude Media, covering the new frontiers of the energy transition.

• 0:07Shayle Kann?

  I'm Shayle Khan. I lead early-stage investments at Energy Impact Partners. Welcome to Catalyst. So at the end of September, the long-term uranium price was $96.50 a pound. That's a record, above the previous high of $95 that was set in 2007, 2008, at the peak of the last uranium bubble. And I should note, as you will hear soon, those numbers are imperfect. Nonetheless, we don't really see a scramble amongst ultimate buyers. They seem to feel that as long as they lock in supply for the 2030s, uranium will be there, as our guest today states. But will uranium be there? Well, first of all, uranium isn't just one market. It's a supply chain. There's mining, conversion, enrichment, fabrication. There

• 0:52Shayle Kann?

  are geopolitics involved. Too many of those links run through Russia, Kazakhstan, and China. We have a ban on Russian enriched uranium that is coming in 2028. So the question isn't just whether there's enough uranium in the ground, it's whether the mines are coming online quickly enough, whether we can rebuild the fuel supply chain that has sort of withered through a decade of low prices, and whether we can do so fast enough to fuel the new reactors that we're not promising to build. Mike Alkin is the founder and CIO of Sachem Cove Partners. We walk through the uranium supply chain, link by link, talk about the bottlenecks, the geopolitics, and the pricing. He's coming up next.

• 1:33Speaker 00

  Catalyst is brought to you by Antenna Group, the communications and marketing partner behind the most influential companies in energy, climate, and infrastructure. For three decades, Antenna has helped ambitious companies stand out, build market leadership, and become category-defining brands. From breakthrough startups to global industry leaders, their team brings the expertise, relationships, and track record to accelerate your momentum. Learn more at antennagroup.com.

• 1:59Speaker 02

  The power plant for the modern grid isn't a building, it's a network. Energy Hub's derm platform connects batteries, EVs, thermostats, and commercial and industrial sites into virtual power plants that over 230 utilities dispatch as reliable grid capacity day in, day out. VPPs deploy in 60 to 100 days at 40% to 60% less cost than traditional infrastructure, and they perform like conventional generation from day one. Learn about the flexibility platform for the modern grid at energyhub.com.

• 2:31Speaker 00

  Demand flexibility is now an essential part of the data center's speed-to-power playbook. But how do data centers actually curtail load? GridBeyond is the end-to-end solution for flexible energy management. GridBeyond's advanced derm and VPP platform is tailored to what data centers care about most: maximizing reliability, intelligently meeting curtailment obligations, reducing costs, and managing all your distributed resources in one place. Ready to transform your distributed energy management? Get started at gridbeyond.com.

• 3:05Shayle Kann?

  Mike, welcome.

• 3:06Speaker 03

  Thank you, Shayle. Pleasure to be here.

• 3:08Shayle Kann?

  All right, let's talk uranium. Let's start by having you, I guess, walk through the value chain for uranium as it exists today, from soup to nuts.

• 3:17Speaker 03

  Sure. So it's, Shayle, it's a, it's a, it's called a nuclear fuel cycle, is what the industry refers to it as. So it's upstream, which would be uranium mining, where they pull it out of the ground in a few different methods, gets processed into something they call yellowcake, which is like a powder. And then that gets processed downstream in a few different stages that takes a couple of years to do, on average. They take yellowcake, which is a powder form, and that in and of itself, it can't enrich anything. So for nuclear power, it needs to be enriched. It comes out of the ground, it's just 0.7% fysial material. So it's got to be enriched up to 3% to 5% for nuclear power. If you're

• 4:00Speaker 03

  making a bomb, it's got to go up to 90%, which can take a very long time. But, so they pass it along to what's called the conversion part of the cycle. And there, they're turning that yellowcake into a gas called uranium hexafluoride. And so from there, it then gets sent on to an enrichment plant. And enrichment's in the news a lot when you hear about the Iran war. It's all about enrichment levels. And so from there, what they're trying to do is they take that gas and they spin it through centrifuges that spin at the speed of sound. And they're trying to get the enrichment levels, like I said, up to 3% to 5%. And then from there, they then pass it downstream even further to a fabrication facility where

• 4:42Speaker 03

  they take the, they form it into pellets, and then those pellets are then put into tubes, for layperson's terms, and then that gets into a reactor. And that whole process is 18 to 24 months, depending on availability of capacity.

• 4:59Shayle Kann?

  And is the, is the market pretty divided up amongst those stages? Or are there vertically graded players who go all the way from mining to fabrication?

• 5:09Speaker 03

  Yeah, fabulous question. So the market is, and we can talk about the opaqueness of the market, but the market is really bifurcated, not only along geopolitical lines and geographies. For example, 70% of nuclear power is consumed in the West, yet 70% of the supply of uranium comes from the East. And along the lines of conversion and enrichment, you also see that, where we go to enrichment, which is where the magic happens, if you will, 41%, 42% of that is in Russia. And then you've got a little bit more in China, and then you start to break it over into the West. But those are state-owned players that the

• 5:48Speaker 03

  West is competing against. In the West, the enrichment capacity, for example, is owned by private companies, or the state, in the case of France, through EDF, through a company called Orano. I should say not through EDF, but it's Orano, which is a state-owned company. And then you have a Dutch, English, German consortium that is owned by the state with one small, a couple of small utilities in Germany called Urenco, and that's a big enricher in the West, but again, not public. So it's very bifurcated geopolitically, geographically,

• 6:26Speaker 03

  and also by ownership type. In the, as you go further upstream, on the uranium side,

• 6:36Speaker 03

  Kazatim Prom, which is the state-owned entity of Kazakhstan. Kazakhstan produces 41% of all uranium in the world. And then of that, about half of that comes from Kazatim Prom, the state-owned entity, which is 75% owned by the Sovereign Wealth Fund. And then, and then you get to Uzbekistan. Uzbekistan could produce 8% to 10% of uranium. And then you start to get to Russia, which is another mid-to-high single digits, sometimes low double digits on uranium. China produces low double digits as you start to get into China itself, which has very little indigenous uranium. But in Namibia, they have significant production capabilities. So the eastern influences have a significant amount of uranium production

• 7:22Speaker 03

  versus the West, as I said earlier, with 70% to 30%.

• 7:25Shayle Kann?

  And then we think historically, have there been, I mean, is this a market that has seen fairly stable pricing and supply and demand? Is this a market that sees big spikes and big crashes? Like, what does the market look like historically?

• 7:38Speaker 03

  So most of the time, it's in a bear market, if you will. And so if you go back to the 1940s, when they started producing uranium, and you look at today, there's been a lot more uranium produced than there has been consumed. But those inventories have been worked off through that lengthy period of time. And the reason I mention it's been more of a bear market than not is, you've had a couple of incidents. In 1976, you had Three Mile Island. Then, we know, we had Chernobyl in the 80s. And then in 2011, you had Fukushima. And each time you've had a meltdown, where, and we'll talk about the safety of nuclear power with all of those, all that you've heard, you've had very little deaths. Per terawatt hour is the safest form of electricity generation. But psychologically,

• 8:22Speaker 03

  it wears, it has a lingering effect. So after each one of those, you tend to see demand start to, whatever the plans were, demand starts to pull back, supply works its way into the market, and it depresses prices. So to give your audience a sense of where pricing has come from, if we, if you think about the 1990s and 2000s, the price of uranium was hovering $7, $8, $9 per pound. That's how it sold, per pound of uranium. And so it was sitting there for quite some time. And then in the early, starting in 2000, it started to work its way up to $8, $9, $10, $11, and $12. By the early 2000 aughts, it started to get into the teens and 20s. Because even though a lot of it is state-owned,

• 9:03Speaker 03

  you still have to deal with the Western producers who need an economic incentive to produce this stuff, because the East can't produce it all. So it starts to get in, started to climb into the 20s and 30s. And then there were some new mines scheduled to come online around 2005, 6, 7. You had some hiccups there, one major hiccup, to where supply looked like it was becoming delayed. And for context, the price of uranium went to $137 a pound. And so you had this massive boom up. Now, interestingly, what winds up happening in this market, because it is so opaque, there's no real electronic price. It's not like gold or copper, where you can see this thing trading in real time. It's really done through the

• 9:46Speaker 03

  cover of darkness. And it's, the spot price is reported once per day at 2:45 PM Eastern Time. And it's, it's the midpoint of a bid in the ass that price reporters go around and do surveys on. The long-term contracting, which is the vast majority, up to 80% of all uranium sold, is done under long-term contracts, that price is reported once per month. And that price that's reported is really not where the market is trading, and we could get further into that. But, but so you had that big, you had that big boom. So over the period of 2000 through 2007, prices went from high single digits up to $137 a pound.

• 10:27Speaker 03

  And then it started to settle in. And the reason it went from, it probably went from 50 to 137 in the, from 05, 06, 07, as there was a big mine coming online, the mine flooded and people got nervous. So who are the, who are the people, when I say that, those are nuclear fuel buyers. Almost all uranium that's consumed, almost all, is consumed by nuclear power plants that generate electricity. And because there's no substitute for nuclear, for uranium, it's not like you, you're a utility and you have a coal plant and a gas plant. And if, if, and depending on economics, you could, you could ramp one up and shut one down. You can't, if, if there is no substitute for, for uranium in a nuclear power plant.

• 11:09Speaker 03

  So because of that, security of supply becomes paramount. And therefore those, those, those purchases are done under very long-term contracts. They could be five, 10, 12 years or longer. Because it takes so long and it takes a couple of years to order. So that's how you tend to see it. As those contracts are, they'll, they'll ebb and flow, but because security of supply is paramount, and because the cost of uranium is de minimis versus the operating cost of a reactor. For instance, the front end of the nuclear fuel cycle, which is what we talked about, mining, conversion, enrichment, fabrication, that could be 20 to 25% of the operating cost.

• 11:54Speaker 03

  Uranium of that could be 35, 40%. So now you're talking, let's say, high singles, low double digits, the cost to operate the plant is the uranium itself. Now, if I'm running a gas-fired power plant or a coal plant, those costs could be 80 to 90%. So the feedstock itself, uranium, is much, is, is, is a much smaller cost. There is no substitute, so security of supply becomes paramount. But what winds up happening with that, since most uranium is purchased under long-term contracts, what winds up happening is a recency bias and a complacency seeps into the market. And if, if you live in the nuclear fuel cycle like, like I do, what you often will hear

• 12:37Speaker 03

  is, well, the uranium ferry always delivers uranium. Now, that's, pricing has gone from a low of, of $17 in November of 16 to well over $100 today. And the psychology of the nuclear fuel buyer, despite prices up 5X on them, that they're paying, is still like, ah, there's plenty of uranium out there. And it's really driven by the opaqueness of the market and the recency biases that are in the market, and the fact that security of supply covers them for most of their needs.

• 13:05Shayle Kann?

  Yeah, I guess.

• 13:06Speaker 03

  Most of the time.

• 13:07Shayle Kann?

  There are two questions that arise for me. The, the first one being, you know, given the structure of the market, like if I'm a, if I'm a nuclear power plant operator, I have pretty good visibility into my fuel requirements. I'm going to be operating at close to 100% capacity factor. I know what I'm going to need. And as you said, the only thing that really matters to me is security of supply. It's not necessarily pricing. Why is there a spot market at all? Why don't I just entirely contract forward at all of my requirement capacity?

• 13:34Speaker 03

  Well, it's a fabulous, it's a fabulous question. So if we look at the composition of the, of the spot market, you're probably looking at 55, 60, 65%, depending on the year, are physical traders. And so those traders will, what they tend to do is they, they will get, and some of the Japanese trading houses, some of the banks will do it, and some one-off random traders will, will come into the market. You're starting to see actually some of the big oil and gas traders come into the market, some of the mammoth ones. You've seen Mercuria enter the market recently, which is enormous. But they will, so what they do is they will tend to, they might help have, helped start financing mine, a small development mine, and they might get some offtake.

• 14:18Speaker 03

  Or the Uzbek's, or the Kazak's, or Olympic Dam, which is owned by BHP down in South Australia, a monster copper mine. One of the byproducts is, is copper. So they may take some of their, they produce 7, 8, 9, 10 million pounds a year and a market that's two, let's round up, 200 million pounds in demand, growing, you know, mid-single digits, to contextualize Olympic Dam. And they may take that and just put it into the spot market. If it doesn't have a committed home, let's say with utility, and because it's such a small portion of what they produce, and it's not that big a portion of the market, they're not, you know, they can't be bothered, they might just sell it. Those traders will take it. And so that activity that occurs for the 20% of the market, 25% of the market, that

• 15:01Speaker 03

  is the spot market, more than half of that are these traders, and they're trading back and forth for a dollar, I mean, a dollar a pound, 50 cents a pound, trying to get what they can get. Now, but because the spot price, and you asked such a great question about why you even have it, because the spot price is the only one that's reported daily, and again, it's not electronic, right? It's, it's a, it's a quiet market, it's over the counter market, it's the only one people look at. And so if we then look at who else trades the uranium, well, some of the, over time, what's happened is Cameco, for example, the largest Western uranium miner. For context, they'll produce 20-ish, 24, 22 to 24 million pounds a year in that, in that market. They're a behemoth.

• 15:46Speaker 03

  And what they do, they might sell 30 to 32 million pounds a year. And so why do they do that? Because they're keeping a bid in the market. And so they'll oversell their contract, but, but there's, because there's such illiquidity in the market, that they're in there buying, they're, they're, they're in there buying in the market. And some other producers who might have some production problems will be in the market. So that could be 15 to 20% of the market. And then that last 15% or so, historically, are other financials that are in there just trying to poke around, or utilities. Now, a utility typically doesn't buy in the spot market because it takes them a couple of years.

• 16:29Speaker 03

  So if they're buying in the spot market today, they, they really have a problem because they can't get that processed anyway. So why have a spot market? It's really just because there are some financial creatures that are in there looking to close an arbitrage once in a while. Some of them have helped finance mines and their, their, their reward is to get offtake and trade back and forth. But even the bigger Japanese trading houses, these are not big businesses for them because the, the market itself isn't that big. And so really, where real price discovery occurs is in the contract market. Now, the contract market, though, is very, can provide a lot of misdirection if one really doesn't focus on the nuances of it.

• 17:09Speaker 03

  So if, if we say 80% of the market is a contract market, the price that gets reported each month is what's called the base escalated, the, the term price is what they'll call. Now, that is the way the price reporters will define that. It's the lowest offer they could find on a contract. So if we characterize that 70% or 80% of the, if 80% of the market's long-term contracts, 70% of that is, is in not that. So a smaller portion, 25, 30% of that market is, is base escalated, where a utility will go to a producer, and you tend to see it in bear market for pricing. A utility goes and says, we would like a five-year contract, make up the, the tenor.

• 17:54Speaker 03

  We'd like a five-year contract for a million pounds a year, and we're going to pay the long-term quoted price today, base escalated. So it might be 3% a year, and it technically gets delivered in the third year onward. That's, that's a base escalated price. And so the price reporters, of which there are two big ones, that will report that price. Now, if we take that vast majority of the pounds that are sold, are not sold that way, what they, so that occurs, that base escalated typically occurs through a request, might occur through a request for a proposal. So Constellation or Duke might send out to the market, we need a five-year contract for 1 million pounds per year.

• 18:39Speaker 03

  And then a number of producers might put in and bid on that. And let's say, pick a number, it's $90 per pound. It's, well, today it's quoted at 97. But, but let's say Duke or Constellation contracted at $102 a pound, or $103 a pound. Why? Because they didn't want to go down in, let's say, to a smaller developer that might have been offering a lower price. Geographically, they might have had limitations. If the price was struck at $102, or $103, or $105 per pound, but there was an offer on that contract at 97, somebody bid $97, that price, that's what they report. That's like you selling a million-dollar home and somebody offered you 800 and it

• 19:24Speaker 03

  gets reported at 800. It, it's not what happened. So you have a, a minority portion of the market that is sold under these base escalated contracts, a small portion of it, and the price reporting on that is done in a manner that's odd at best. Where, where the market really occurs is bilaterally negotiated. That's off-market is the term. It's just, it's not put out to RFP. And, and by the way, fuel buyers, nuclear fuel buyers, they're nuclear engineers. They're not traders. These are not folks trading coal and gas that are commercial creatures. The economic incentive to a nuclear power plant buyer is not buy low, sell high. It's don't run out of fuel, that keeps your job, and keep our plants running safely.

• 20:09Speaker 03

  So as a result, there's not an economic incentive to, to call bottoms. And so where the contract really occurs is, hey, well, we're going to call you, we're not going to put out an RFP into the market. The fuel buyers are savvy enough to know if they put an RFP in the market, they're going to get small developers who need a contract win, who might come in and set the bar low. So they're constantly, and the fuel buyers did that through 21 and 22 and 23, as prices were going. The way they can do that is get that desperate little developer who probably has no chance of producing uranium, but they, but they'll make it, give the old college try, and, and yet that, because they come in lower than what the, the bigger producers will come

• 20:52Speaker 03

  in at, they know the price reporters will set that price low. Now, that's in a, in a, in a buyer's market. Now you're in a seller's market, the opposite is happening.

• 21:04Speaker 00

  If you work in energy or climate, you already know the company's Antenna Group has helped build. For three decades, they've been the communications and marketing partner behind the industry's breakout companies, category creators, and market leaders. Today, their team is working across the most consequential areas of the energy economy, from data centers and grid modernization to nuclear, geothermal, storage, critical materials, and next-generation technologies. Antenna helps ambitious companies become the names everyone in the market knows, trusts, and wants to work with. They build reputation, elevate executives, drive demand, and turn momentum into market leadership. If your company is ready to lead its market, Antenna is ready to help you get there. Visit antennagroup.com.

• 21:48Speaker 02

  When you harness the power of millions of DERs in a VPP and put artificial intelligence behind the dispatch, the outcomes exceed conventional generation. Energy Hub's DERMs platform has been trained on years of real dispatch data from over 2.6 million DERs, so utilities can plan with confidence. That means consistent load reduction across a four-hour event window, even during the widest, most uncertain peak periods. Utilities target, shape, and verify capacity down to the meter. Unlock flexible capacity that costs 40% to 60% less to deploy than traditional infrastructure in a fraction of the time it takes you to break ground on a peaker plant. Learn more at energyhub.com.

• 22:30Speaker 00

  For data centers, connecting to the grid quickly means two things: building distributed energy and having a plan for demand flexibility. Grid Beyond helps with both. Grid Beyond's DERMs and VPP platform unlocks the potential of distributed assets and dispatches flexibility into the right market at the right time. And this is more than software. Grid Beyond supports developers every step of the way, from modeling your highest ROI energy mix to orchestrating the full set of assets around a data center. The track record speaks for itself. Grid Beyond manages over 1,400 sites and more than 3.7 gigawatts of load across Europe, the UK, and the US. Learn more at gridbeyond.com or click the link in the show notes.

• 23:16Shayle Kann?

  So let me take a step back for a second. I mean, you mentioned that the buyer's attitude right now, even at prices that are up 5X and over $100 a pound, is like, there's enough uranium. Is there enough uranium?

• 23:28Speaker 03

  No. And so, just for background, I mean, I have 30 years in the hedge fund business and looking at deeply out-of-favor industries. And in 2016, one of the industries I started looking at, managing my own money after the firm I was at, the partner I was... We moved, they turned into a family office. And one of the industries that I started looking at was uranium. And I started going to nuclear power conferences. And nobody was there. Wall Street was not there. The industry prices had collapsed 95%. The equities were down 95%. If you looked for a model from the sell side,

• 24:12Speaker 03

  from a Goldman or anyone, they hadn't had a model in years. So it was abandoned. And when you started talking to those fuel buyers at these conferences and said, hey, I'm learning about the nuclear industry, they'd say, you're wasting your time. Pricing is $15, $17, $18, $20. It's going to $10. It's going to $5. Well, I spent the next... Shortcut it. I spent the next two years building a model of every reactor on the planet and every mine on the planet. And the reality was, at $17, $18, $19, once those contracts expired, the price of uranium to extract it out of the ground back then was, you had to be well over $50 a pound. And so, I knew the math was not right. And so, what wound up happening over the last several years,

• 24:57Speaker 03

  there's a number that we look at. It's called replacement rate contracting. And so, if the industry consumes 200 million pounds a year, it was 175 when I started looking at it. It's going up to 200. Are they contracting at that same rate? Because if they're not, they're drawing down inventories. Well, when you look at the amount of inventory that has been drawn down over the last decade, it's been a staggering amount. And so, the recency biases of people who were trading off of prior year's contracts in a market that where pricing had collapsed, they just always believed that uranium would be there. Well, here we are. Fast forward. Over the last decade, the replacement rate of contracting is about 55%.

• 25:42Speaker 03

  So for every pound a utility consumes, they're replacing about a little bit more than half of that. So therefore, you're not testing the economic viability of the uranium production complex in the world. Yet, prices have still risen from the high teens to over $100 per pound. And that's without stressing the market, stressing the supply. Why? Because the supply that they believe is always there isn't economically viable. There is a difference. Now, to put something in context, Shayle, Kazadoprom, the state-owned entity, is the largest in the world. Kazakhstan itself produces 41%.

• 26:25Speaker 03

  And through a series of JVs with Russia, China, the Canadians, the French, they produce half of it with those JVs and half for themselves. They came public 2018, 2019, and they put out a very thorough 700-plus-page prospectus. They are by far the lowest-cost producer in the world. And in that prospectus, they looked out, going out through 2040. And their all-in sustaining cost of production was in the mid-teens then. And they said, by the time we get to the mid-20s, you look at 2025, it was going to be around $13, $14 a pound. And they were using a tangay of 340 tangay to the dollar. Now, they cost in tangay and sell in dollars,

• 27:09Speaker 03

  so a weakening tangay helps their profitability. Well, fast forward to 2025, and here we are in early 2026. The cost to produce that same pound is not $13, $14, it's $40. And on a constant currency basis, because the tangay had weakened so much, it's $55. So their costs have gone absolutely parabolic. And the price of uranium's risen, but not nearly as much as to offset the rise. So you've seen production curtailments. Over the years, you've seen curtailments come. Why? Because the Kazakhs realized, we don't need to produce like the Soviets, old Soviet style. You're losing money, produce more.

• 27:52Speaker 03

  Well, what they do is they've cut back production quite a bit, as you've seen production cuts across the entire complex. So you ask the question, is there enough uranium? There is not enough economically viable uranium. That horse has left the barn. The utilities waited too long to incentivize new production. So over the past, since 2011, when Fukushima happened and all this excess supply hit the market because demand had weakened, well, that was 15 years ago. And so, inventories have been sucked down. The recency bias is that what's always there, the uranium ferry will deliver uranium. Well, as they've gone in and tested the economic viability of production capacity at only half the clip of replacing what they're using,

• 28:36Speaker 03

  prices have gone up 5X. And so, they're hoping beyond hope that new mines will come online. And there are new mines coming online. That still doesn't cover them.

• 28:48Shayle Kann?

  Is your view, then, that the bottleneck, the reason there isn't enough uranium, it's upstream, it's mining? It's not that there is insufficient conversion or enrichment capacity?

• 28:59Speaker 03

  So one of the things you'll hear, it's a really good question. If you... One of the narratives you'll hear is, well, conversion is a bottleneck and enrichment is a bottleneck. And there is enough... Price is the great elixir, right? So, right now, if you think about this whole fuel cycle, there's one product, and that's uranium. Everything is a service. Converting it is a service. Enriching it is a service. Fabricating it is a service. Now, so when we look at, the price of conversion has gone from $4 per kilogram to $60 per kilogram. That has incentivized new capacity to come online.

• 29:42Speaker 03

  There is still more capacity that's needed, but that's the flick of the switch. That is signing long-term contracts. Cameco and others could bring enrichment. And Metropolis, which is a Honeywell spin-out owned by Solstice at Metropolis, Illinois, they could bring it on. Price will do that. And in a few years, you'll have the equipment and you can build that productive capacity. Same thing with enrichment. Enrichment went from $35 per separated work unit up to 200. Well, that incentivized capacity is coming online. Urenco or Rono, they're bringing capacity online. It's coming into 20... or 2030, 2031.

• 30:20Speaker 03

  A uranium mine, from the time from discovery to production, can take 20 to 25 years. And if you look at where these things were built, the big, the big scale ones, not the ones, you know, this is, this is the world of junior, a lot of it is junior mining. These are small, tiny companies that are running around saying, "Look at me, we have the lowest cost in the world." No, you don't. You know what you'll see right now? If you read, if you read many of the decks that are out there from a lot of these, they'll say, "We have $40 costs." Well, the world's lowest cost uranium miner now has $40 costs. You don't have $40 costs. So as you're, as you're thinking about uranium mine, the bottleneck is going to be, you will, there are, there are inventories around the world.

• 31:04Speaker 03

  And but as prices rise, inventories become dearer. They don't become more mobile. And so there's one other element that makes the ability in the fuel cycle to add up to 20% more uranium than is actually needed. It could be a little bit more. Where, where demand will, it will create demand, and that's in the enrichment process. There's something called underfeeding, which is, without getting into the nuances and bore people to death, the way that centrifuges spin, if there's too much productive capacity, if you think about an apple press, if, if I had an apple press and I didn't have, and I wanted to make a gallon of apple juice,

• 31:49Speaker 03

  think about a centrifuge that way. So I, I would throw a bushel of apples in, and I would do what I'm doing, and I'd get a gallon. If I had no other order coming behind me, I could keep that press spinning, and I could probably get a gallon. And if I kept squeezing those apples, get a gallon and a quart, gallon and a pint. But I would have more. Well, when, when there's not enough enrichment demand, those centrifuges are spinning. They can't be shut down once they get turned on. So it's, there's very little cost to produce. Electricity is about 5% of the cost of production. So when they have excess capacity, like they did during a downturn after Fukushima,

• 32:33Speaker 03

  they take the enriched, they take the uranium that's spinning, they make enough for the order, for the utility, and then whatever they can extract for themselves, they keep and they sell into the market. And that's called underfeeding. And that's, that's a nuance of the enrichment portion of it. Now, conversely, if you didn't have enough enrichment capacity, and there was a demand on that capacity, well, what you could do is add more apples to that apple press, if you need an ounce and a quarter, but you didn't have, you couldn't run it for the full amount of time. You needed to run it less time because there was so much demand, you had to keep churning. You would put in more uranium. Well, where you are in the cycle right now

• 33:17Speaker 03

  is you've gone from uranium underfeeding. And at one point in time, Shayle, the amount of enrichment that was being underfed, the underfeeding of uranium, the amount of uranium being produced in a down market, in a bear market, was the equivalent of the world's largest uranium mine. There was an extra 20 million pounds of uranium being produced at the uranium enrichment plants that was being sold into the market. It was almost pure margin for the enrichers. Well, here we are, fast forward to where there's not enough enrichment capacity. Right now, you're getting to the point where it's close to them needing to overfeed those centrifuges. You're not there yet, but you can pencil it out and see it

• 34:02Speaker 03

  that they're going to need to rush out and buy more uranium on limited capacity. So what does that do? That puts an extra buyer of uranium into the market. Now, they can, they can add up to 15, 20%, extract more uranium, but that's going to put even more of a demand on the uranium itself.

• 34:24Shayle Kann?

  Let me ask you, though, about, I guess as a final question, about the geopolitics a little bit, which you alluded to, but we haven't really talked to you directly. I mean, I know there's a ban coming on Russian imports of enriched uranium into the US. How important is that?

• 34:37Speaker 03

  It's important. I mean, what it does is, right, you know, right now, the Russians are having, so we, they send in enriched uranium, we send them back U308 feed. That's not, we, we've sent hardly any back recently, only a little bit. The Russians in, people tend to think, for example, "Oh, the war might end with Ukraine. The Russians are going to send a lot of uranium in." The Russians don't have enough uranium because they have two needs for it. One is they have their own reactor fleet in Russia, and then they have an export where they build reactors, right, across the Belt and Road, and they build them, and they, they help finance them, they help operate them, and they feed uranium, they supply the uranium to them.

• 35:20Speaker 03

  There's not enough uranium for them, so they need uranium. Now, they sell enriched uranium to the United States. Okay, so if, if the Russian ban went away, psychologically, people would say, "Oh, okay, well, the Russians are going to flood the market." They're not going to flood the market with uranium because they, they're, they don't have enough uranium. So there would be enriched uranium. And with that said, well, enriched prices have already gone up, contracts are being signed, and that will do what it's going to do. So, I, I mean, you know, Congress passed it. It's signed. The ban is for 28, and that is what it is. You know, so we're, we're focused on the U308 portion of it,

• 36:03Speaker 03

  understanding, does Russia have enough uranium itself for the enrichment? Well, they're scrambling to get, to get uranium for it. Now, they also can underfeed their, their centrifuges, which they do. But it's, it's, it's a challenge for them.

• 36:21Shayle Kann?

  All right, Mike, this was super informative. Thank you so much.

• 36:24Speaker 03

  You're welcome.

• 36:27Shayle Kann?

  Mike Alkin is the founder and CIO of Sachem Cove Partners. This show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics. This episode was produced by Max Savage Levenson. Mixing and theme song by Sean Marquand. Anne Bailey edits the video version of the show. Stephen Lacey is our executive editor. All of our episodes are on YouTube. You can subscribe to latitudemedia.com for episodes of this show and Open Circuit. You can find the audio version of the show anywhere you get your podcasts. I'm Shayle Khan, and this is Catalyst.