As the price of uranium starts to rise and utilities companies come to the end of their supply, such companies are once again looking into the benefits of long-term contracts to secure a steady supply of uranium. Uranium Investing News spoke with David Talbot, vice president of mining and senior analyst with Dundee Capital Markets, to put together a brief overview of how long-term contracts work and how they benefit both uranium producers and buyers. Breaking it down Long-term contracts are arrangements under which utilities companies agree to buy uranium for a set price over a guaranteed amount of time. This provides them with a secure supply source and in turn gives producers a guaranteed source of income. In recent months, Ur-Energy (TSX: URE) has been one example of a company that's taking advantage of long-term contracts. It supplied uranium for $59.96 per pound in 2014′s third quarter, making a 92-percent premium. Now, with uranium prices looking set to increase, more interest in such long-term contracts appears to be back on the horizon. That's in contrast to 2013, which was not a happy year for uranium producers, with mistrust following the Fukushima nuclear disaster coming home to roost. Long-term contracts declined from about 190 million pounds of uranium in 2012 to 20 million in 2013. "2013 was an anomaly," said Talbot, adding, "it's not sustainable." The next rush Talbot said a large amount of contracts with spans ranging from seven to 10 years were signed in the 2006 to 2007 cycle. With that time range set to expire in the next few years, utilities companies are on the hunt for a steady, secure source of uranium.