Russia is currently facing several sanctions due to the ongoing Ukrainian war. Despite this, it still maintains economic ties with Western countries. Moreover, it possesses a valuable resource that other nations require to advance their nuclear energy programs: uranium.
The new trend. The U.S. is seeing a renewed interest in nuclear energy. This is partly driven by the need for large technology companies to find power sources for their artificial intelligence products. The government aims to commission 300 new next-generation reactors and integrate them into the grid by 2050. It also plans to replace all coal-fired power plants with nuclear energy. However, it faces a major challenge in securing an adequate supply of uranium to support these initiatives.
Enriched uranium. Enriched uranium production has been increasing. Russia currently controls about 27% of the world’s uranium conversion capacity and 39% of the global nuclear fuel enrichment market.
Although Kazakhstan is the leading uranium producer with 46%, followed by Namibia and Canada, Russia’s influence, which currently stands at 5% of world production, lies in its ability to enrich and process uranium. As a result, the state-owned company Rosatom controls 36% of uranium handling and supplies nuclear fuel to more than 78 reactors in 15 countries.
Why have no sanctions been imposed? Since the start of the Ukrainian war, both the U.S. and Europe have imposed sanctions on Russian gas, oil, and even food. However, one material has been exempt: uranium. The Department of Energy has said that the U.S. is totally dependent on Russian uranium, and a ban would cost the country $1 billion. The U.S. initially evaluated sanctions on Rosatom but finally ruled them out.
What about the European Union? Like the U.S., the EU has been unwilling to sanction the Russian company. It directly depends on it to keep its nuclear power plants operational. Moreover, Rosatom has continued to move funds to Russia from its subsidiaries in Europe, demonstrating its ability to circumvent restrictions.
From black gold to radioactive gold. The world’s major banks and even tech titans like Bill Gates have their eyes on nuclear energy. Factors behind this change of direction include oil volatility, the need to reduce emissions, and, above all, the quest to diversify the energy market to establish energy security. Nuclear energy offers a constant supply that’s highly desired by large technology companies and their data centers.
China is making strides. In the last few years, the country has been focusing on nuclear fusion, which is seen as the next big step in energy production. Additionally, China claims that it can develop this technology at half the price of its U.S. counterparts.
The race for nuclear energy is gaining more participants, and there’s a clear paradox on the global stage. While striving for energy independence and sustainability, the West has become dependent on a resource controlled by Russia.
Image | Nicolas Hippert
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