You might recall that I spent a lot of time detailing the opportunity in uranium stocks earlier this year.
Including a Three-part Series that dug into France’s uranium supply problems.
That’s a problem, especially considering all the countries now looking to follow France’s successful nuclear blueprint.
As I explained, France has built a significant competitive advantage in Western Europe thanks to its unwavering dedication to nuclear power.
In fact, of all the nations that have taken on the nuclear challenge, including Germany, the US, and Japan, France is the only country that has maintained its commitment.
Russia’s Chernobyl disaster, America’s Three Mile Island accident in Pennsylvania and Japan’s Fukushima disaster in 2011 have caused others to falter on their ‘nuclear ambitions.’
With almost 70% of its total energy derived from nuclear energy, France offers a playbook for how resource-starved nations can guarantee energy security.
And that’s why more nations are looking to pivot to nuclear
But as I detailed in your three-part series, uranium supply is tight; there’s not much spare capacity for new consumers in this market.
To illustrate what I mean, in 2022, total global production of raw uranium was 49,355 metric tons.
Of that, just THREE countries swallowed up about 80% of the global supply!
France consumed 8,780 metric tons.
China gulped 11,300 metric tonnes.
And the US exhausted a whopping 18,050 metric tonnes.
Clearly, there’s not a lot of spare capacity in this market. And that’s a problem for the new players…
If you’ve been following this issue (like I have), you’ve probably seen a bunch of European countries clambering back to nuclear. Energy security is a hot topic for Europe.
But it’s also high on Donald Trump’s agenda, a key reason uranium stocks popped last month after the US administration committed to building more reactors.
Another critical point: while the US is currently the world’s largest consumer of uranium with around 94 commercial reactors in operation, China will soon overtake it…
According to the World Nuclear Association, China has around 58 operable nuclear reactors. However, 31 reactors are under construction, and 40 more are planned for construction!
That brings it to 129 nuclear reactors!
Easily making it the world’s largest consumer of uranium in the years to come.
These are hard numbers that show firm commitments for future uranium demand. Given the enormous costs, a pledge to build new reactors doesn’t come lightly.
In other words, higher demand is virtually baked in.
But, based on current production figures, this market has little spare capacity to absorb that future demand.
So, what does that mean?
Until new mines can be built (a multi-decade undertaking), there will be much higher demand for the limited supply currently available.
To me, this looks like an opportunity.
Until next time.
Regards,
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James Cooper,
Editor, Mining: Phase One and Diggers and Drillers
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