Today, we’ll pick up from Monday’s edition and continue our three-part special series on the Uranium market.
As detailed earlier in the week, France has access to abundant, reliable, low-carbon energy thanks to its unwavering commitment to nuclear over the last several decades.
The country has built an energy fortress while most of its European neighbours remain hostage to external supply, like Russian gas.
Not only that, but France’s access to cheap baseload power also means it’s in a prime position to absorb lucrative data centre projects.
Major backers like Microsoft and Amazon are pouring billions into developing energy-hungry data centres throughout France.
As I mentioned earlier in the week, Charles de Gaulle helped lead the country in the fight against Nazism. Now, his nuclear legacy is helping to establish France’s AI future!
No matter what innovation brings, ENERGY will remain the limiting component.
And France has established a massive competitive advantage thanks to its ability to generate cheap, base-load power.
In an era when the West faces declining productivity, ageing populations, unsustainable energy costs, and sticky inflation, nuclear truly is the economic prescription!
But there’s a catch….
France has one critical kink in its otherwise impenetrable ENERGY FORTRESS.
One that could have important implications for commodity investors.
So, let me explain.
Lights out over Paris
This is where we touch on the dark side of France’s heavy pivot to nuclear power.
As I pointed out earlier, France is not endowed with mineral wealth.
According to the World Bank, the country imported about 12 million kilograms of natural uranium in 2023.
To put that in perspective… Total global production that year was about 60 million kilograms.
That means France alone absorbed about 20% of the entire global supply!
But what would happen if more nations recognised France’s competitive advantage and pivoted to nuclear? As investors, we should consider this.
Yes, demand would eventually drive more output at uranium mines. But nothing moves quickly in the mining sector.
New mines take years, sometimes decades, to achieve approvals, financing and all of the rest!
But this is an exceptionally deep problem for uranium, given that its supply chains have profound geopolitical risks.
Exposing France’s fragile supply
France was once a global empire, using its mighty fleet of naval vessels to secure international supply chains of key commodities like gold, sugar, tobacco, and rubber.
While France ‘officially’ surrendered its colonial breadbaskets years ago, powerful connections remain… What some might label as ‘hidden colonialism.’
France has maintained an active presence in its former colonies, especially mineral-rich West Africa.
Don’t be fooled! This is not about maintaining peace and democracy like the mainstream would have you believe.
It’s about securing raw materials.
Over the years, France has deployed thousands of troops across uranium-rich Niger.
This landlocked West African country holds some of the world’s largest uranium reserves and gifts France around one-third of its requirements.
And for years, the French, aided by local elites, have bled this uranium-rich country dry.
Despite feeding France with an abundance of uranium and powering it toward economic dominance, Niger remains one of the poorest countries on Earth.
Famine, drought, war and poverty remain the daily plight of most people here. But times are changing for the French and the West more broadly…
The West is Losing Its Grip on Established Supply Chains for Raw Materials
Across France’s former colonies, significant leadership changes are taking place. New Junta governments are replacing former pro-Western dictators.
And these new leaders tend to despise Western governments and their international mining companies!
Gold miners across Mali are waking up to this new reality.
And in 2023, a coup d’état broke out in uranium-rich Niger, ousting the country’s President.
Mohamed Bazoum was a cozy ally for the West, a key reason France had access to a cheap, reliable uranium supply.
But as I’ve outlined, that situation is looking precarious…
In 2024, the new Junta government cut military ties with the US, ordering 1,000 American troops out of the country.
And since coming to power, it has cosied up to new allies in China and Russia, nations which are also keen to grab hold of Niger’s vast uranium reserves.
Clearly, France is losing its grip on Niger and West Africa more broadly.
The region has grown tired of feeding the West with abundant resources, receiving little in return. And that represents a significant threat to France’s ENERGY FORTRESS!
For the moment, Niger continues to export uranium to France. But how long that lasts is anyone’s guess!
Approximately a third of France’s uranium supply comes from the Sahel…
A dispute that creates a sudden supply disruption will devastate France’s energy security.
In my mind, governments, investors and the West are not paying attention to this potentially major threat.
But this is not a problem isolated to France:
This has a much broader implication for any country looking to tap into the miracles of nuclear energy.
I’ll conclude this three-part special series on uranium next week, detailing additional risks to supply and opportunities to target during the uranium sell-off.
Regards,
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James Cooper,
Editor, Mining: Phase One and Diggers and Drillers
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