Reactors under construction equal MORE uranium demand

Continuing with our special focus on uranium today.

In our last edition, we highlighted why the uranium market has a very clear growth pathway.

According to the World Nuclear Association, China has around 30 nuclear reactors under various stages of construction.

Not planning, not approval; it’s a fleet of emerging multi-billion-dollar projects are being built as we speak.

And when they come online, they’ll need fuel.

Just like the 40 or so other reactors that are currently under construction across the globe.

But as I pointed out, uranium buyers, which are essentially the utility companies, won’t be entering this market on even footing.

Soon to hold the world’s largest fleet of nuclear reactors, China will have dominant pricing power in this market.

It’s a dilemma that could threaten the West’s reliance on Kazakhstan, the world’s largest uranium supplier.

China is already heavily interwoven with Kazakhstan miners in both current and future projects. Chinese state-run companies own stakes in Kazakh miners.

China also invests heavily in ‘goodwill’ projects for its uranium-endowed neighbours, sweetening contract deals by offering to build railways, highways, ports and bridges.

Clearly, China is on a path to capturing the lion’s share of uranium production from this region, and that doesn’t bode well for everyone else.

A solution: Canada

After Kazakhstan, Canada is the world’s largest uranium producer.

And much of that supply comes from just one company: the Canadian mining firm Cameco.

Canada could play a critical role in filling the West’s uranium gap.

As I pointed out earlier in the week, nationalism is rife across Africa; uranium supply in these regions remains uncertain as junta-led governments pivot to Russia and China.

But few point to the pitfalls of relying on supply from Kazakhstan and its prospective neighbours, such as Mongolia or Uzbekistan.

China is set to swallow up the bulk of the supply from its direct Asian neighbours.

That’s why Canada will play a vital role in the West’s growing appetite for uranium fuel.

But will it be enough?

Probably not.

Canada lacks the political will to grow production. It remains reliant on mines developed long ago and stuck in endless planning and approvals for development projects.

It’s a similar situation in Australia. Production is limited, hampered by regulation and a lack of engineers specialised in uranium extraction and processing.

Several states remain nailed to legacy bans on uranium mining.

But according to Geoscience Australia, the country holds the world’s largest untapped reserves, even larger than those of Kazakhstan or Canada.

Clearly, Australia needs to lift its game, roll up its sleeves and get its world-leading reserves into production if the Western sphere aims to compete on the nuclear stage.

Canada can’t fill that void alone.

A flight to ASX Uranium Miners

The race is on…

Uranium options for the West are tightening, and this is destined to become more acute as China’s production line of reactors hits the market.

It’s a dilemma that could re-awaken interest in uranium exploration.

A flight into homegrown uranium projects that aim to tap the world’s largest reserves.

Leveraging on their production experience, French-owned Orano and the Canadian-owned Cameco could emerge as key backers of small ASX-listed explorers in the months to come.

It’s an opportunity worth following.

As I said, one of the most favourable elements for this commodity is the clear demand pathway: reactors under construction.

Adding to that demand outlook are the numerous reactors being brought back into service throughout Europe, North America and Russia.

According to the World Nuclear Association, these factors are set to increase demand by 28% before 2030.

Or a doubling in demand by 2040.

These are not arbitrary projections; they’re pegged to multi-billion-dollar construction projects.

Reactors under construction equal MORE uranium demand.

If you’d like to learn more, you can do so here.