Investing in Uranium Stocks
Uranium’s complex relationship with mankind started in the 1890s, when its radioactive properties were first discovered by Nobel laureate Henri Becquerel. Since then, the value of uranium has moved in concert with public sentiment around its implementation for military and energy purposes.
According to the World Nuclear Association, the majority of the world’s uranium supply is used for generating electricity via base load energy. In the United States alone, uranium is responsible for 10-15% base load electricity. A small percentage is used to produce medical isotopes. The remaining supply is used for weaponry and other military applications. Yet, while plans for new nuclear weapons are in the works, the appetite for new weapons is limited to a few select countries.
Uranium is extracted using one or more of the following processes: open pit, underground, or in-situ. Open pit mining is used for deposits found near the surface, typically requiring less capital expenditure than underground operations. However, this mining method can be environmentally problematic, leaving the potential for costly remediation efforts.
Underground mining extracts ore bodies that are too deep to access using an open pit method. In these circumstances, the rate of excavation underground is slower than in an open pit operation. The process can also be more hazardous for miners, leaving some operations vulnerable to legal action.
In-situ mining can be used where ore deposits are sandwiched between rock layers that are impermeable yet porous enough to allow water to flow through. The deposit is injected with a mix of groundwater and oxygen via injection wells, then the ore is pumped to the surface. This method often requires a lower capital expenditure, potentially making the stock an attractive option.
Why Invest in Uranium Stocks?
Uranium pricing has seen challenges since the 2011 Fukushima disaster. Moreover, supply has grown since countries such as Kazakhstan have been increasing uranium production. However, there are signs that demand could be rising globally.
Believers in uranium’s potential as an energy source include China and India, which are expected to make up around 70% of future global demand for uranium ore. While nuclear power’s future in other countries remains unclear, industry experts believe there will be significant growth due to the current nuclear commitments. Electricity demand will grow by nearly 50% between 2018 and 2050. Current reactors in operation globally are 447, under construction 55, planned 111, and proposed 328. China alone has 47 reactors currently, 11 under construction, 43 planned and 170 proposed.
How to Invest in Uranium
So, how do speculators participate invest in uranium? Unlike gold, you can’t possess uranium. But you can “hold” uranium by investing in uranium mining stocks and or ETF’s. While spot prices of uranium remain low, the long term contract prices are rising, thus creating a potential great buying opportunity in uranium junior mining companies. Uranium investing is not for the faint of heart, however – it requires in-depth knowledge and precise consideration of multiple factors. And, that’s where Proven and Probable can help.
Uranium Expertise to Inform Your Decisions
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We help you sort through timing and other challenges of uranium investing. Our insights come from a combination of industry research, interviews with uranium mining operations, and connections with passionate precious metal experts who choose to share their wisdom and research.
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