A look at market conditions when these operations were suspended provides at least an indication of the conditions necessary for a restart. A large number of potential uranium producers with well defined plans for development and operation exist today. These potential producers are poised to make a major contribution to future uranium supply. When one assesses the ability of potential producers to compete with existing producers, clearly existing producers have a number of advantages. These producers have much greater flexibility than others in that they are not strictly dependent on conditions in the uranium market, but rather on a combination of conditions.
Great latitude is also available in the accounting treatment of uranium production costs.
Consider certain gold producers in South Africa, where uranium recovery enhances subsequent gold recovery through a reverse leaching process. Thus, uranium production might actually occur at a loss, but that loss is more than balanced by gains on the gold side of the equation. An additional advantage of operating in South Africa is the ability to write off against revenue all capital costs in the year in which they are incurred. Some 1.8 million t of uranium were produced during the period 1946-1996. It is this accumulated inventory that provides the vast majority of secondary supply.