Whether we go down the nuclear energy path or not is still being debated, but one thing we know for sure is that uranium will continue to make headlines writes Wealth Within co-founder and chief analyst Dale Gillham.
There seem to be two main worldwide issues that have dominated our collective rhetoric in 2023: one is alternative energy and the other is war. Interestingly, a naturally occurring yellow element called uranium is in the middle of both these debates.
Uranium is arguably environmentally friendly and can fuel nuclear power plants to provide cheap energy; however, as we all know, it is also the main ingredient used to make weapons of mass destruction.
It is also making headlines right now for another reason: its price has risen to just over US$80 per pound, soaring from a low of US$50 earlier this year to highs not seen since 2008.
What may not be widely known is that uranium also plays a crucial role in various industries, such as zapping cancer cells in radiation therapy to estimating the age of rocks.
What is affecting the price of uranium?
Nuclear proliferation, supply chain vulnerabilities and strategic resource control are current buzzwords around uranium that affect its price. There is also the concentration of uranium production in just a few countries including Kazakhstan, Canada and Australia, which only serves to increase concerns about supply chain vulnerabilities and geopolitical tensions.
Part of the surge in price can be attributed to an increasing appetite for nuclear power to achieve ‘net zero’, and supply disruptions at the Cigar Lake mine, Key Lake mine and McArthur. The recent coup in Niger, a significant uranium producer, has also added to supply uncertainties, particularly for Western Europe.
Australia is the world’s third-biggest producer of uranium, with many ASX-listed companies involved in uranium mining, production, and supply. The largest include BHP Group, Rio Tinto and Paladin Energy, although others you may not have heard of include Boss Energy, which is focused on restarting the Honeymoon Uranium Project in South Australia. Deep Yellow is also working towards becoming a multi-mine company.
The company’s Tumas and Mulga Rock projects in Namibia and Western Australia position it as a key player with significant growth potential. Silex Systems is also innovating uranium enrichment technology in partnership with Global Laser Enrichment LLC.
The way I see it, as the world grapples with transitioning to cleaner energy sources, the role of uranium is becoming increasingly significant. Whether we go down the nuclear energy path or not is still being debated, but one thing we know for sure is that uranium will continue to make headlines.
