The cost of uranium has been on the decline in recent years, and the chart below might lead some investors to wonder if nuclear energy could soon be getting a boost due to uranium cost savings. However, Jefferies analyst Anthony Crowdell argues nuclear power operators are not getting much of a boost from falling uranium prices.

According to Crowdell, uranium must go through four important (and expensive) steps between the time it comes out of the ground and the time it goes into a nuclear reactor:

1. Mining:

Solvents are removed from the ore to form uranium oxide “yellowcake.”

2. Conversion:

The yellowcake must be set to a conversion plant to be chemically altered into uranium hexafluoride.

3. Enrichment:

The uranium is enriched with additional isotopes to make it fuel-grade.

4. Fuel Fabrication:

The uranium is converted into fuel pellets and loaded into a fuel assembly.

Jefferies estimates that less than half (46 percent) of the cost of nuclear fuel is associated with the price of uranium.

“Although nuclear plants have a fuel costs advantage the high levels of O&M make…

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