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The world's largest uranium producer, Kazatomprom, is anticipating production issues over the next two years, which can trigger a price rise in uranium.

According to CNBC, delays in construction and issues related to the availability of sulfuric acid, vital in the uranium extraction process, will likely lead to the Kazakh mining company falling short of production targets through 2025, which will send uranium prices on another rally.

Uranium Prices at 16-Year Highs

The news comes as other major producers also struggle. It echoes similar issues faced by major producers like Canada's Cameco, reporting decreased production, and France's Orano, closing its Niger operation, CNBC reported.

Kazatomprom, the world's leading uranium miner, reportedly manufactures over one-fifth of the world's production. The company also produces 43% of the world's uranium supply, the biggest slice of the global market for the heavy metal.

Currently, uranium prices are already at 16-year highs. The world reportedly came from a decade of supply shortages, and the deficit will continue as "we're in the middle of the biggest reactor build program in decades," according to Guy Keller, portfolio manager at investment and advisory firm Tribeca.

With over 60 nuclear reactors under construction in 17 countries and 110 in the planning stages, uranium is experiencing renewed attention as a pivotal material in bringing nuclear energy back as an alternative power source.

Uranium Demand

Governments' initiatives to transition away from carbon-emitting fuels and reduce dependence on Russian oil and gas have amplified the demand for uranium.

At the COP28 climate change conference, over 60 countries supported a plan to triple global renewable energy capacity by 2030, bringing nuclear energy into focus that pushed prices of uranium higher.

Currently trading at around $106 per pound, uranium prices have reached 16-year highs, with analysts expecting prices to continue to rally. A potential US legislation to ban Russian-enriched uranium imports is also a supply concern.

Russia, the sixth-largest uranium producer, might retaliate, heightening the risk of disruptions to the nuclear fuel supply chain. According to CNBC, Citibank forecasts uranium prices to average $110 per pound next year.