Uranium Market Melt...Up?

Author

Future Money
January 12, 2024

⚡ Five Second Summary:

The nuclear and uranium momentum is gathering pace as the UK plans to expand nuclear power, aiming for 24 gigawatts of capacity by 2050.

Meanwhile, global concerns rise over uranium deficits and geopolitical tensions are impacting the supply chain, and the uranium price.

📊 The Chart

🤔 What's Happening:

  • The UK eyes a new nuclear power plant, intending to quadruple capacity by 2050; discussions hinge on the final investment decision for the Sizewell C station.

  • Plans include adding 3 to 7 gigawatts every five years from 2030 to 2044; private investment models and small modular reactors (SMRs) are considered for future nuclear projects.

  • Globally, nuclear expansion is gaining traction, with over 60 reactors under construction and plans for an additional 110 by 2050.

  • Geopolitical tensions and uranium deficits prompt the US House to vote on banning Russian uranium imports, highlighting vulnerability in global uranium supply chains.

  • In mid-December, the US House of Representatives approved legislation that would ban importations of enriched uranium from Russia.

  • AND - Nuclear power was a key focus of the recent COP28 meeting.

🔢 Numbers + Facts:

  • The UK is aiming for 24 gigawatts of nuclear capacity by 2050, which could require 3 to 7 gigawatts added every five years from 2030 to 2044.

  • Over 60 nuclear reactors are under construction globally, with plans for an additional 110, as nations commit to tripling nuclear capacity by 2050.

  • Uranium prices have more than doubled over the past year due to structural deficits and geopolitical uncertainties.

🔮 Looking Ahead:

  • The UK's nuclear expansion is further evidence of the global push towards nuclear power and the need for more uranium supply.

  • Challenges in uranium supply chains and enrichment capacity will continue to drive investment decisions - companies that can provide on both these fronts may be a useful tonic to bottlenecks.

  • There may be a growing emphasis on private investment models, exploration, and advanced nuclear technologies, including SMRs.

📈 The Company: Haranga Resources (ASX:HAR)

Market Cap: $18M | Share Price: $0.21 | Industry: Mining

Haranga Resources (ASX: HAR) is a junior explorer defining a uranium project in Senegal, Africa. HAR owns 70% of its Saraya project, which has an existing JORC resource of 16m Lbs uranium.

How does HAR fit into the story?

HAR’s project already has a JORC resource of 16.1Mlbs and its resource sits on a part of its project that is much smaller than the remaining undrilled uranium targets the project has. HAR is currently drilling to try and multiply that resource.

HAR’s project used to be owned by one of France’s biggest nuclear energy companies - Areva (recently renamed to Orano).

Areva was a French public multinational company involved in nuclear energy, including nuclear power plant design and construction, nuclear fuel supply, and nuclear services.

HAR’s project was owned by Areva twice in the past - both periods when the uranium price went parabolic.

With the global push towards nuclear power, there may be a growing emphasis on early stage uranium exploration companies to meet demand.

📰 Mainstream Media Coverage

Bloomberg

“There is no net zero without nuclear,” Bowie said. “No one is trying to suggest that it’s not expensive to deliver, but it’s an expense we can’t afford not to spend.”

Financial Times

“Inventory drawdowns and secondary supply can fill a small part of [the supply] gap, but the deep hole created by the loss of Kazakh production would need to be filled with uranium from OECD nations.”