The World Nuclear Association held its annual symposium last week in London. One of the essential news items from the meeting was the release of the Association’s Nuclear Fuel Report.
The report stated that uranium demand is likely to surge by 28% by 2030.
Demand for uranium in nuclear reactors is expected to climb by 28% by 2030 and nearly double by 2040 as governments ramp up nuclear power capacity to meet zero-carbon targets, the World Nuclear Association (WNA) said in a report on Thursday.
Interest in nuclear power has also risen since Russia invaded Ukraine and many nations want alternatives to Moscow’s energy supplies, the report added.
“From the beginning of the next decade, planned mines and prospective mines, in addition to increasing quantities of unspecified supply, will need to be brought into production,” the report said.
Nuclear capacity is expected to rise by 14% by 2030 and by 76% to 686 GW by 2040.
I always get asked if I am still bullish on uranium and nuclear power. I always answer yes. As I have often said, nuclear power is the cleanest, cheapest, best form of bulk electric generation known to man.
In the last couple of years, we have seen government after government make announcements on new reactor builds and existing nuclear plant operating extensions and generally come to the acknowledgment that any energy transition away from fossil fuels will have to include nuclear power.
The demand portion of the equation is good and getting better. The problem, and our opportunity, is on the uranium supply side. The world is currently seeing a massive supply shortage because, like with many other minerals, we must invest more to develop new uranium deposits.
This is easier said than done because although there is plenty of uranium in the ground, it takes years to permit, plan, and build a mine. It does not help the supply situation when governments that say they are at the forefront of the energy transition ban uranium mining.
President Joe Biden on Tuesday established a new national monument protecting nearly 1 million acres of federal lands adjacent to Grand Canyon National Park from uranium mining and other development.
Biden’s designation effectively cements a 20-year mining ban that the Obama administration put in place in 2012. It will not affect existing mining claims or the two active mining operations within the monument’s boundary.
Regardless of what one thinks of the politics of such actions, it is a fact that the US electricity grid is 20% nuclear power. Our US Navy submarine fleet and aircraft carriers run on nuclear power. Yet the US mined almost no uranium domestically in the last few years. We are still dependent on foreign sources of processed uranium, much coming from Russia or Russian-aligned entities.
Depending on uranium from a country we are currently at war with, albeit through a proxy, seems stupid.
Add it all up, and the bottom line is what I have said for the last few years: uranium supply is constrained, and demand is growing. The setup is even better than when we entered the trade a few years ago.
Expect the bull market in uranium to continue and for it to exceed the previous price high and for it to last longer. This trade truly has the potential to add a couple of zeros to your net worth. Be patient and buy the dips.
P.S. The price of spot uranium traded at $62/lb this past week. This is a 17 month high in the metal.