The raw material is called yellowcake, a coarse reddish-yellow powder made up of oxidized uranium that is milled from mined ore. Yellowcake contains scant radioactive elements and is put through various milling processes and eventually turned into fuel rods, which are used in nuclear power plants. The milling process separates the uranium and the vanadium from the other minerals. Vanadium is used to harden steel.

World demand for uranium will be 185 million pounds in 2013, estimates the Nuclear Energy Institute in Washington, while supply will likely be significantly lower at about 130 million pounds (Clifton Farrell, Nuclear Energy Institute, senior project manager). In the United States, 103 nuclear reactors in 31 states provide electricity to one of every five homes and businesses.

World production of electricity from nuclear power is also increasing. Currently there are 440 nuclear power reactors located in 31 countries. The world Nuclear Association reports that at least 8 countries (China, Finland, France, India, Japan, Pakistan, Russia and South Korea) have plans to build new power reactors beyond those already under construction. In total, about 35 more nuclear power plants are currently in the planning stage, with several dozen more being proposed. In April 2005, China announced that they plan to build 40 new nuclear reactors in the next 15 years. Russia has announced plans to double its nuclear capacity by 2015. A number of nuclear plants have also announced expansion plans, which will increase uranium demand for years to come.

It takes several years for new uranium discoveries to be developed into producing mines. Due to the lead time required for new uranium mine development, a significant increase in the market price of uranium will not result in an immediate comparable increase in production. Thus the price fro uranium is likely to move much higher and stay there longer, a benefit to uranium exploration companies.