In case you missed it, Bill Gates is in town.
The tech billionaire has spent the past few days in Australia, attending events and giving out speeches.
In particular, Gates has been talking about the pandemic and the global response — a topic that certainly gets divisive when you dig into the weeds of it.
But that’s not what I want to discuss today. The bigger story that Gates mentioned, in my view, is Australia’s position on nuclear power. Because as Gates himself told the Australian Financial Review:
‘Australia should watch over the next 15 years and see what the progress is on nuclear fission and fusion…
‘…it’s a lot simpler for Australia, instead of dealing with a political challenge, just to see if it does emerge, and in which case, if it is worth reconsidering.’
In other words, we’re too late to the nuclear party. A fact that I’m sure many critics will be more than happy about.
It’s hard for people to look past the nuclear power disasters of the past. Events like Chernobyl and Fukushima are etched into our minds because of how climactic we’re told they are.
No one wants to risk that in their own backyard.
And yet, it’s a shame because I expect Australia will miss out on a huge energy market disruption because of it…
Nuclear renaissance
I spent much of last year talking about the resurgence of nuclear across the world. Europe, in particular, has had to rely on their old nuclear plants to shore up their networks after blocking Russian oil and gas.
This has led to some peculiar consequences, both positive and negative for nuclear proponents. But the most pressing matter has to be the fact that some of these reactors are running for far longer than intended:
‘Already, many of the world’s facilities are scheduled to run far beyond what’s considered the typical 40-year lifespan. Operators are pushing to keep some reactors running for as long as 80 years,
‘By the end of the decade, two-thirds of the world’s currently operating nuclear reactors will be running on borrowed time, splitting uranium atoms longer than they were ever designed or licensed to…’
This, of course, increases the risk of another complication…a fact that nuclear critics will no doubt be jumping on to push for the move away from nuclear power.
It should be the complete opposite.
If anything, these outdated plants prove that further investment is needed!
As Bill Gates is alluding to, development and innovation in the nuclear energy space is pushing ahead in bold, new directions. Because of that, countries around the world are investing in their own nuclear future.
Even in previously reticent nations, like in Germany where a phase out was underway, opinion has shifted. As one article on the matter suggests:
‘Previously, the majority of the public was in favor of the nuclear phaseout in the aftermath of the Fukushima disaster; now over 80% are in favor of extending the lifespan of Germany’s existing nuclear reactors.’
Australia’s role
My point is, a nuclear renaissance seems to be upon us. And while Australia seems destined to sit it out from a technological perspective, it could play a role in other ways…
Uranium, for example, is still a key ingredient in the nuclear mix. So, while we may not have our own nuclear plants, we certainly have plenty of uranium mines that could profit from this nuclear resurgence.
We’ve already seen some of this play out in stocks like Paladin Energy [ASX:PDN]. The $2.4 billion uranium miner has seen its share price soar since late 2020 when the first signs of a nuclear revival began. And if things continue, it could see its valuation climb even higher still.
But uranium isn’t the only commodity that could benefit from this nuclear boom…
Circling back to Bill Gates’s comment, he singles out how nuclear fission and fusion are very different. In fact, fusion has the potential to provide the world with a nearly limitless and cheap form of power forever. The challenge is turning the theory into reality.
However, in order to make fusion possible, certain minerals and elements may be necessary.
Hydrogen, for example, more specifically its two isotopes deuterium and tritium, are the most popular fuels for current fusion experiments.
On top of this, lithium also seems destined to be a key component in fusion power.
And more recently, scientists have shown that tungsten could play an important role too.
In other words, no matter where the technology leads, raw materials and fuel will be a key part of the mix. For Aussie investors looking to be a part of the nuclear renaissance, this may be your best bet to get involved.
Because even if the politics has hamstrung our own nuclear industry, our metals and materials may still be the key to unlocking its global potential.
Regards,
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Ryan Clarkson-Ledward,
Editor, Money Morning
