The energy-hungry Asian economy has driven a nuclear power plant construction boom that has increased uranium prices seven-fold in the last five years and threatens to eat up current global supply, according to CIBC World Markets latest Monthly Indicators report.

The report finds that surging electricity demand, rising fossil fuel prices and concerns over greenhouse gases has brought about a resurgence in nuclear energy with 80 new reactors either currently under construction or approved worldwide. More than half of these plants are located in Asia.

“Just like we have seen with oil, the appetite for uranium to feed the rapidly growing energy needs of the burgeoning Chinese and Indian economies is straining supply and driving prices up,” said Jeff Rubin, Chief Strategist for CIBC World Markets, in a news release.

The spot price for uranium oxide, the standard fuel for commercial nuclear reactors, hit an unprecedented US$52/lb earlier this month. Since 2001, the increase in uranium prices has been nearly four times greater than the increase in world oil prices. The report predicts prices will continue to climb and likely reach US$70/lb by the end of 2007. While at absolute record highs, the real cost of uranium remains below the prices set during the two main nuclear post-war booms of the 1950s and 1970s.

The rapid building of new plants across Asia will likely see the region surpass the U.S. in terms of both installed capacity and uranium consumption in the next five to 10 years. This new demand will outstrip supply within the next decade if new sources are not rapidly developed, according to the report.

“Mine production supplies only 62% of the uranium used today,” adds Rubin. “The rest comes from a variety of other sources such as natural and enriched uranium inventories and the reprocessing of spent reactor fuels — and supplies from these secondary sources are steadily declining. Increased demand from Asia will continue to put pressure on prices and the need for more rapid mine development.”

Canada is the world’s largest uranium producer at just under 12,000 tonnes per year.