Industry Insight

Uranium mining is a re-emerging industry due to a global shortage in demand. As of now, only 60% of worldwide demand is being extracted from the earth with the other 40% being supplied through the Megatons to Megawatts Program ™. The Megatons to Megawatts Program—conceived after the end of the Cold War and sponsored by the U.S. Department of Energy and its Russian counterpart—dismantles nuclear warheads and reworks the bomb-grade fuel into energy-grade fuel, which is then used in nuclear power plants to produce electricity. One metric ton of weapons-grade fuel, or high-enriched uranium (HEU), will create approximately 30 metric tons of low-enriched uranium (LEU). As a result of this program, 367 metric tons of HEU (the equivalent to almost 15,000 decommissioned nuclear warheads) have been converted into more than 10,000 metric tons of LEU. (United States Enrichment Corporation, 2008)

Currently there are 432 nuclear power plants around the world—104 of which are on U.S. soil—with plans to increase this number significantly. The ongoing and increasing demand for these plants’ fuel means that the future of the uranium market is very favorable. Mining production, however, has stagnated since the late 1980’s due to the Megatons to Megawatts Program providing LEU at a much lower cost than mining can. Now that this program is winding down and expected to be completed in 2013, uranium prices have risen and mining and milling activities have increased in the U.S. Tomcat is perfectly positioned to become a dominant player in this industry.

A word about nuclear power…Although still a source of controversy for some, nuclear power is being viewed favorably as a clean and efficient power source not only by the government, but also by those who have historically been opposed to it (i.e., the Sierra Club). While coal-fired plants operate at 80% efficiency and produce greenhouse gases and other noxious byproducts, most nuclear plants operate at 120% efficiency and emit no greenhouse gases. Additionally, nuclear power plants require less fuel for their output, which further reduces the carbon footprint of the industry. Unfortunately, nuclear waste is still an unresolved issue; however, research and development efforts are creating methods to re-work spent fuel for re-use. Also, advancements in power plant technology have created systems that will actually burn some of the waste, so there will be less waste eventually. The location of a permanent storage facility for spent fuel is still being finalized, with the Yucca Mountain repository being the preliminarily approved location.