Uranium prices have plunged almost 25 percent in the last six weeks due to a massive glut in the market, partially caused by decisions made by the U.S. Department of Energy (DOE).
The price of common uranium compounds slumped to $18.75 a pound in late October, down from almost $25 six weeks earlier — that’s 45 percent lower than at the start of the year.
Uranium producers have been stockpiling huge amounts of the stuff and are now selling it off with the expectation that the price will drop further.
“I’ve been informed that the current selling is being done by brokers who took positions earlier this year,” Harry Anthony, president of the Uranium Producers of America, told The Daily Caller News Foundation. “As you might expect at this time of year tax lost selling takes place. This is what we believe is occurring.”
Uranium prices have been continually falling since the 2011 near meltdown of the Fukushima Daiichi power plant, which caused public opinion to turn against nuclear power. In early 2011, uranium was trading around $70 a pound.
Today’s low uranium prices are also partially due to the DOE dumping vast swaths of uranium onto the market to fund its operations, lowering the price enough to harm the U.S. uranium industry. Since 2011, DOE has sold off roughly $1 billion of publicly-owned uranium through private sellers without overseeing the transactions, and research by the Government Accountability Office found DOE did not did not properly value uranium sales or adequately assess any impact on the commercial uranium market.
Another major factor is that environmentalists and left-wing politicians have used alleged environmental risks to cripple the American uranium industry, allowing foreign producers, especially Kazakhstan and Russia, to flood the American uranium market. As a result, American uranium mining is on the decline as a result of the extremely strict regulations, with fewer new holes drilled and expenditures for new land, exploration, and drilling declining 22 percent, according to the U.S. Energy Information Administration (EIA).
American commercial nuclear reactors doubled their purchases of Kazakhstani uranium in 2014, largely due to the decline in the amount of the American uranium industry. Kazakhstan alone now supplies 23 percent of the uranium for America’s nuclear reactors, according to the EIA.
The biggest example of this was Democratic Virginia Gov. Terry McAuliffe citing groundwater concerns to prevent America’s largest uranium deposit from being mined since 2013, sharply cutting domestic supply. McAuliffe chaired Hillary Clinton’s 2008 presidential campaign.
In 2013, McAuliffe threatened to veto legislation to end the 33-year-old moratorium on uranium mining in Virginia, citing worries mining could harm drinking water quality. The governor even refused to develop uranium mining regulations. Virginia Uranium is suing McAuliffe over his decision not to allow uranium mining, arguing uranium regulations are the purview of the federal government, not the states.
If McAuliffe had allowed mining, Virginia Uranium would have created an estimated 1,052 jobs and created $5 billion in revenue for Virginia companies. The average annual salary of these jobs would have been around $65,000, according to the company’s website. Instead, the business venture is still stuck on the ground.
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