Categories: Energy / General Market Commentary
Topics: General Energy / General Market Commentary

The ideal position if you are a uranium believer

The ideal position if you are a uranium believer

[Editor's note: adapted from Hallgarten & Co.'s note on Western Uranium]

In what was a bad four years for the mining space, special punishment was reserved for the uranium sub-space where every time it tried to stagger to its feet it was dealt a new, low-blow that sent it reeling. Even as mining markets have picked up in 2016, uranium has been, relatively, left behind as the spot price wallows and that acts as an anchor holding the sub-space from moving forward. Only the Rare Earth space gets to share in this “cruel and unusual” punishment.

However, the persistence of those that believe in the long term attractiveness of nuclear power has kept the space afloat and allowed even a few hardy near-producers or those holding past-producing properties, like Western Uranium, to soldier on through the tough times.

Hard core Uranium bulls know how Moses felt when he was doomed to wander forty years in the desert and never get to see the Promised Land. The great hope had been that the Japanese reopening would help matters and yet it hasn’t (at least not yet). The second hope (quite a vain one) was that the Germans would see the light on their unilateral closure actions (and they have not). The one consolation being that everyone else in Europe regards the Germans as crazy for taking the action they did while still mouthing platitudes to low carbon emissions and ramping up coal-fired power at the same time!

To the dismay of many that see nuclear as a “green” solution to rising global energy demand, some have pitched nuclear as competing against wind and solar, with Germany being a particularly egregious example of “kooky” thinking on this front. Ironically though the German decision has prompted the country to buy nuclear-sourced electricity from France, the paragon of nuclear users with around 80% generated from this source.

This chart shows the countries with the strongest potential capacity additions in nuclear generation.

To view chart and continue reading please click link http://www.mining.com/web/the-uranium-supply-crunch/