Is Uranium emerging as an investment for the future?
Team Veye | 06-Sep-2022
Historically, uranium had been used as a colouring agent in decorative glass and ceramics. But, with the starting of world war 2, the uranium mining increased, from the late 1940s to 1970s, as the United States experienced a uranium mining and milling boom, milling being the process of removal of uranium from the ore, because of the demand for nuclear weapons and nuclear power. While Scientists were testing nuclear weapons, environmental studies with radioactive waste were also being conducted.
Uranium is highly abundant, is a relatively common element in the crust of the Earth. It is a metal approximately as common as tin or zinc, However, in 2020, mining production was only able to cover 74% of the world’s current reactor requirements.
Considering that the demand for electricity will only keep rising and the global push to pivot to green energy is only going to grow stronger as climate change’s effects become more obvious, nuclear power and thus uranium is going to elicit huge demand.
The road to net zero emissions could be well progressed with uranium. A small sized pellet of uranium can create the same amount of energy as 17,000 cubic feet of natural gas, a ton of coal, or 120 gallons of oil, making it extremely efficient.
Severe expertise destruction and IP loss from decreasing number of uranium-focused companies over the past decade has left a fragmented junior sector, with inexperienced management teams and underfunded projects. Because of low uranium prices, many mines which have small perspective areas don’t find it profitable or feasible. While some uranium mines are discovering other ways to cost reduction/optimising beneficiation process, timing is ideal for large consolidation of uranium sector.
Uranium industry is now witnessing building up of positive momentum supported by several macro demand themes coming out of Europe and the United States with recent Japan’s initiative further enhancing it.
Uranium industry is well positioned for compelling value uplift in global energy transition. Investor and government sentiment towards nuclear is improving, driven by acceleration towards clean energy and aggressive emission targets.
A uranium investment could be not just sound fiscal decision-making, it's an investment in the future of the planet too.
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