A mine-based uranium market clearing model

Abstract

Economic analysis and market simulation tools are used to evaluate uranium (U) supply shocks, sale or purchase of uranium stockpiles, or market effects of new uranium mines or enrichment technologies. This work expands on an existing U market model that couples the market for primary U from uranium mines with those of secondary uranium, e.g., depleted uranium (DU) upgrading or highly enriched uranium (HEU) down blending, and enrichment services. This model accounts for the interdependence between the primary U supply on the U market price, the economic characteristics of each individual U mine, sources of secondary supply, and the U enrichment market. This work defines a procedure for developing an aggregate supply curve for primary uranium from marginal cost curves for individual firms (Uranium mines). Under this model, market conditions drive individual mines' startup and short- and long-term shutdown decisions. It is applied to the uranium industry for the period 2010-2030 in order to illustrate the evolution of the front end markets under conditions of moderate growth in demand for nuclear fuel. The approach is applicable not only to uranium mines but also other facilities and reactors within the nuclear economy that may be modeled as independent, decision-making entities inside a nuclear fuel cycle simulator.