Why Uranium? The Recovery has begun
- Japan developing a nuclear energy plan to tackle energy prices and decarbonization, including extending current reactor life, and constructing new reactors.
- Over 60% of Japanese now support nuclear – a huge positive change in sentiment.
- Japanese nuclear expansion has potential to significantly impact uranium demand, adding further pressure to prices.
- US govt. has approved $700M funding package for nuclear.
- Multiple new reactor programs including UK, France & South Korea. India plans to triple reactor fleet over next decade.
- New uranium ETF sand buy & hold funds such as SPUT have tightened the spot market further.
- Spot price hitting highest levels in over ten years. Long-term prices rising at a steady rate with little volatility.
- M&A activity has increased with Cameco and Orano acquisition of Idemitsu’s stake in Cigar Lake; UEC acquisition of UEX.
- SMR development moving fast. First SMR factory build announced (in the US) which will allow rapid roll out. Countries including Canada plan to install multiple SMRs before end of 2020s.
- China has committed $440 billion to develop 150 nuclear reactors over the next fifteen years in efforts to become carbon neutral.
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Uranium Miners May Be Poised to Take Market Share
- Nuclear energy generates 10% of the world’s electricity 1 and more than 50% of zero-carbon emissions electricity 2
- Uranium miners are miniscule in market capitalization compared to the largest energy companies, namely oil & gas conglomerates
- US. Department of Energy has requested $4.3B to assist with transition away from Russian sources of uranium
- Aug. 7 climate and energy provisions of Democrats’ Inflation Reduction Act commit US$370 Billion toward clean energy
- New U.S. climate & energy bill to provide $15/MWh tax credit for existing reactors
- Biden’s infrastructure bill supports nuclear: $6 billion to support at-risk nuclear power plants Funding secured for $3.5B of advanced nuclear power
“With around two thirds of the world’s electricity still coming from burning fossil fuels, reaching these climate goals by 2050 will require at least 80% of electricity to be shifted to low carbon sources, according to the International Energy Agency (IEA).”
1) North Shore Sprott Uranium Miners Index; 2) the eligibility list of the Solactive Global Nuclear & Components Index; 3) Uranium companies screened through Bloomberg and Factset. Selected companies are those identified to have a substantial portion of their business model related to the mining of uranium. Source: Factset as of 6/30/2022.
Nuclear Energy is Reliable…
Nuclear energy has the highest capacity factor1 versus both traditional and alternative energy sources, prompting renewed attention to help solve global energy needs. Most nuclear power utilities are required to hold at least three years’ worth of uranium supply2.
Uranium is responsible for the lowest mortality rate per terawatt hour (TWh) of energy produced Post-reactor radioactivity shows significant reductions after just 10 years.