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View attachment 169746
Which could be in part why prices are rising as fast as they are.
Unfortunately I could not access the article, only the headline.
jog on
duc
Shortly after Vladimir Putin ordered the invasion of Ukraine in 2022, the US banned all imports of Russian oil, liquefied natural gas and coal. But not all energy supplies were included in the US sanctions, nor in those of its European allies. On the contrary, western powers have taken care not to interrupt the flow of raw materials and services from Russia’s state-owned nuclear giant Rosatom and its subsidiary Tenex. Moscow’s invasion exposed many vulnerabilities in US and European energy supplies, not least in the nuclear sector, where more than a fifth of the enriched uranium fuel required to power both regions’ nuclear fleets comes from Russia. For the US energy sector, it was a call to action. Utilities companies have spent two years stockpiling nuclear fuel in case Russian supplies are disrupted. At the same time, Washington is undertaking a multibillion-dollar push to rebuild its nuclear supply chain, which was ravaged by a collapse in demand after the Fukushima accident in 2011 and years of neglect. The earthquake and tsunami, which hit the east coast of Japan, caused the worst nuclear disaster for a quarter of a century and prompted many governments to rethink deployment of the technology. The sudden pullback in investment sparked a crisis for many private companies supplying uranium and ancillary services, such as conversion and enrichment, which are needed to fuel reactors. “We had a huge supply chain before the Fukushima crash sort of wiped out the market,” says Daniel Poneman, the former chief executive of Centrus Energy Corp, a US nuclear fuel company.
The market fallout embedded a dependence on Russia. For example, Tenex has a monopoly on commercial sales of a type of uranium called Haleu, or high-assay low-enriched uranium, required to power the latest generation of reactors. The US was the only country in the world to privatise its “sensitive” dual use nuclear technology sector, says Poneman, leaving it exposed. Then, Russia’s full-scale invasion of Ukraine turned “the whole world of nuclear energy on its head” prompting Washington to race to reboot the industry. After initially lobbying Washington against the imposition of sanctions, the US nuclear industry has now committed to ending reliance on fuel enrichment and conversion services from Russia. And although phasing them out will take years, Congress is mulling over legislation to ban imports from Rosatom and Tenex. Russia’s war coincided with an uptick in demand for nuclear energy as an alternative to fossil fuels. US President Joe Biden’s climate team has called it a key technology that can help the world achieve the goals in the Paris Agreement. Last month Washington joined 21 countries, including the UK, France and Japan, in pledging to triple nuclear capacity by 2050. The US’s plans for its domestic industry have attracted support from France, Canada, Japan and the UK, who together have pledged $4.2bn to boost enrichment and conversion capacity globally. They plan to build new nuclear reactors and are exploring deployment of small modular reactors (SMRs), which advocates contend are safer and more efficient than existing technology. Private investors, including Bill Gates and OpenAI chief executive Sam Altman, are backing start-ups developing SMRs. Japan’s earthquake and tsunami in 2011 caused the worst nuclear disaster for a quarter of a century and prompted governments to rethink deployment of the technolog. Demand for uranium and nuclear fuel has also surged because the US, UK and several other western nations have extended the lifetimes of existing nuclear reactors, even as China and Russia race to build new units. The turnaround in sentiment has sparked a rebound in uranium prices, which have tripled since the start of 2021 to $106 per pound, a 16-year high. But success is not guaranteed, say analysts, who note that rising costs, high interest rates and project delays have caused a sharp fall in market support for nuclear start-ups. Critics also contend that the sheer expense of nuclear infrastructure, the industry’s poor record of cost overruns and safety concerns mean public money would be better spent on rolling out renewable energy. “The industry is fighting a public relations battle to convince people that it can play a role in mitigating carbon emissions. But the fundamentals haven’t really changed: nuclear power is more expensive than most other forms of electricity,” says Edwin Lyman, director of nuclear power safety at the Union of Concerned Scientists. “There is a risk government subsidies support a series of one-off projects, essentially glorified science projects, rather than laying the foundations for the safe and economic deployment of nuclear power around the world.” The nuclear fuel supply chain begins with mining and milling uranium ore. American production of the ore peaked in the 1980s. While some unexploited deposits remain, the domestic industry has struggled to compete with lower cost rivals overseas. US nuclear plants now import most of the uranium they use, sourcing almost half of supplies from Russia, Kazakhstan and Uzbekistan. The chemical process of converting the ore into gas and then enriching the presence of the uranium-235 isotope to a level of about 5 per cent — so that the fission process can happen and energy can be released — is even more specialised. Diagram explaining the uranium fuel chain from mining to waste storage There are only two major western suppliers of enrichment services, France’s Orano and Urenco, a UK, German and Dutch consortium. China has built enrichment capacity to meet its own needs. This leaves Russia as a dominant player, with almost half the world’s commercial capacity. More than a fifth of the fuel used by the 93 nuclear reactors in the US is supplied through enrichment contracts with Russian suppliers, mainly Rosatom. The European Union is even more dependent on the company because of its 18 Russian-made reactors in Finland, Bulgaria, Slovakia, Hungary and the Czech Republic, which have until recently relied on Russian fuel. “There are alternative sources of mined uranium in the world, such as Australia and Canada, but the weakest link in the nuclear supply chain is enriched fuel,” says Kevin Book of Clearview Energy Partners, a Washington-based independent research firm. Tenex’s monopoly control of the market for high-assay low-enriched uranium (Haleu), which is more powerful than standard nuclear fuel and used in SMR reactors, is already causing problems for some US reactor projects. In December 2022 TerraPower, a company founded by Gates, announced a two-year delay to construction of a planned new 345-megawatt reactor in Wyoming, citing fuel constraints. “Russia’s invasion of Ukraine caused the only commercial source of Haleu fuel to no longer be a viable part of the supply chain for TerraPower, as well as for others in our industry,” Chris Levesque, chief executive of TerraPower, said in a statement in December 2022. The Biden administration is pursuing a three-pronged strategy to rebuild the enrichment and conversion supply chain: subsidise domestic industry; enlist international partners in a “friendshoring strategy”; and impose sanctions on Russian imports to protect investments by taxpayers. Kathryn Huff, assistant secretary for nuclear energy at the US Department of Energy, says the strategy is vital to safeguard America’s national security, energy independence and climate goals. It is also a moral imperative to stop providing funds to Putin’s regime, which she says is waging “an unjust war” and engaging in “unacceptable behaviours” around energy systems. “Every dollar we pay that goes to Russian companies is a dollar that we would rather Russia not have to help fuel their war against Ukraine,” says Huff. Nuclear exports from Russia generate just under $1bn in US sales per year, mainly in uranium, enrichment and conversion services, according to analysts. This is a fraction of the tens of billions of dollars that Russian oil and gas firms generate for the Putin regime, but the trade does leave US utilities vulnerable to sudden and lasting interruptions in supply. “I’ve thought about it every day since even before the Russian invasion of Ukraine: the potential that Russia could at any moment cut us or our allies off from supply of this material,” says Huff. In a bid to break Russia’s grip on SMR reactor fuel, the US Department of Energy is co-funding a demonstration project in Piketon, Ohio, led by Centrus Energy Corp. In November scientists working at the company made a breakthrough. Using a 16-centrifuge cascade system, they enriched uranium to a higher level than normal to produce 20kg of Haleu, the first time the fuel has been produced on US soil. Just three tablespoons of Haleu is enough to supply a whole lifetime’s worth of energy for the average US consumer, according to the company. In November, scientists using a 16-centrifuge cascade system enriched uranium to a higher level than normal to produce 20kg of Haleu. It was the first time the fuel has been produced on US soil © Centrus Following the success of the project, Centrus says it will compete for more government funding to expand Haleu production, aiming to become an alternative to “foreign, state-owned, state-subsidised competitors”. Washington’s drive to rebuild its fuel supply chain reflects concerns that Russia and China are gaining a technological lead just as the global nuclear sector is booming, with 60 reactors under construction and a further 100 planned. Russian and Chinese rivals have successfully designed and built SMRs while US companies have so far failed to deliver on plans. Meanwhile, Rosatom is building more than 30 standard nuclear reactors overseas, including in China, Vietnam, Hungary and Bangladesh, and in December 2022 boasted that it has $200bn in foreign orders for the next decade. Industry experts warn the type of long-term relationships Rosatom builds with foreign governments when constructing reactors hands Moscow a potent soft power tool. It also raises concerns about nuclear weapon proliferation in authoritarian states. “Nuclear technologies tend to lock in diplomatic ties in a way that other energy sources don’t. This is why we need friends and allies to build a resilient and economically efficient supply chain that can build an enduring industry,” says Book from Clearview. The Biden administration has begun to support this strategy. In November it asked Congress to approve an extra $2.2bn to incentivise US-based companies to boost enrichment and conversion capacity. It has pledged billions of dollars in support to several SMR developers and this month launched a $500mn request for proposals from companies for the supply of uranium enrichment services. These government programmes propose to make the Department of Energy a long-term buyer of last resort for companies to assure adequate fuel supply for the existing nuclear fleet and the type of advanced reactors proposed by Gates’ TerraPower and Altman’s Oklo, which require Haleu. Huff says this is necessary to protect US industry from undercutting by Rosatom, which has previously dumped cheap enrichment products on the market. Imposing a US ban on imports of uranium products from Russia is another vital pillar of the administration’s strategy, she adds. Last month the House of Representatives passed such a bill, although it contained waivers allowing the import of certain materials if there is no alternative supply available until 2028. A similar bill still needs to pass in the Senate but has attracted bipartisan support. For its part, the US nuclear industry expects a ban to be legislated this year. It would raise fuel costs for US reactor operators by 13 per cent, according to the Congressional Budget Office estimates. Utilities are also preparing in case Moscow orders Rosatom to immediately halt supplies to US power plants with “tit-for-tat” sanctions. “It is a real risk. It is probably 50-50 whether they [Russia] would cut off supplies or carry on,” says Malcolm Critchley, chief executive of ConverDyn, a US-based provider of uranium conversion services. In the nuclear sector Russia has historically been a dependable supplier that honoured its contracts, he says. But if Moscow thought there was little chance of re-entering the US market in the future it could cease supplies. Huff says domestic utilities have built up enough stockpiles of enriched nuclear fuel to tide them over until more domestic enrichment capacity can be brought online. The administration is also working closely with industry partners in the UK, France and elsewhere in a bid to speed up supply chain investments to build capacity, she says. A first salvo of these investments is now under way, although extra production by European allies will still take several years to come to fruition. In the meantime, the US has limited domestic enrichment capacity. Centrus shut down a cascade of 120 centrifuges at its Piketon facility in 2016 due to funding cuts by Washington. It followed a Chapter 11 bankruptcy protection filing by Centrus in 2014 following the post-Fukushima collapse in prices. It is currently only operating the Haleu demonstration project. Over the past seven months Urenco has approved three investments aimed at boosting enrichment capacity, including at its $5bn plant in Eunice, New Mexico, and at plants in Germany and the Netherlands. France’s state-controlled Orano is investing €1.7bn to extend the capacity of one of its French plants by roughly 30 per cent, with the extra production due to come online in 2028. Between the two groups, roughly half of what Russia sells today to the US and Europe will be replaced with the extra capacity. But completely replacing Russian supplies would likely require building entirely new factories and exploiting new mines. A policy of quotas would create a reference framework to invest without the risk of ending up in overcapacity For that to happen, the companies involved say they need more midterm contracts with clients. Orano has been spurred recently by renewed US demand since the Ukraine war and clients in eastern Europe turning away from Russia, according to Orano customer and strategy director Jacques Peythieu. More political or regulatory clarity, including in the EU, would also be a factor. Although some big EU nuclear champions like France do not rely directly on Russian fuel, finding a consensus in the bloc for action or a ban on supplies from Moscow, when so many plants in the east still need them, is for now a non-starter. Companies like Orano argue that before investing in big new projects they need guarantees that, years down the line, Russian supply is not going to be allowed to flood the market again. “A policy of quotas would create a reference framework to invest without the risk of ending up in overcapacity,” Peythieu says. There are signs that some of the technological challenges in countering Russian supplies — such as designing fuel rods that can fit Russian-made reactors — are being overcome. In June 2022 Ukraine signed a deal with Westinghouse, a US nuclear technology company, to supply all the rods for its existing Russian-made plants. Last year the EU selected the company to lead a coalition developing a nuclear fuel supply chain more broadly. Plant Vogtle unit four, part of the nuclear power plant near Waynesboro, Georgia © Hyosub Shin/AP “We are the only player who has a technology, which is totally independent from Russia, to supply the fuel to those Russian-made reactors,” says Patrick Fragman, Westinghouse chief executive. But enrichment capacity remains an area where the west needs to move faster to “mitigate the Russian risk”, he says. “If you want to go fast, if you want to go at scale, you need government intervention.” Despite the push by policymakers, many senior nuclear executives remain cautious given the industry’s history of booms and busts. The failure of X-energy, a company developing SMR technologies, to conclude a $1.8bn Spac deal to go public late last year has dented market sentiment. As has the subsequent cancellation of plans by NuScale Power Corp to build the first US SMR in Idaho. ConverDyn was forced to mothball the only nuclear conversion facility in the US in 2017 during the last downturn. It reopened the facility last year, but Critchley says the company would need to link future investment decisions to increased customer demand. “We will not take a speculative position. When utilities come with real orders and real demand then we will seriously consider adding capacity — and we’re not actually seeing that yet.” Additional reporting Harry Dempsey in London Graphic illustration by Ian Bott Copyright The Financial Times Limited 2024. All rights reserved. La
jog on
duc
Uranium spot price up about 6% last night after the Kazataprom update.
KAZ is the worlds largest producer and is in a spot of bother.
View attachment 170021
Better to take a smaller profit than a smaller loss.URNM and URNJ up over 7%. Should be a good day for our sector today. Feeling greedy and also think I should be taking profits. Vexed.
I listen to a few poddies, most just fund managers talking their book and sticking to the program.Better to take a smaller profit than a smaller loss.
Mick
I listen to a few poddies, most just fund managers talking their book and sticking to the program.
The last month or 3 the only (rare)mentions of U stocks has been NXG, PDN, BOE and the very occasional DYL, BMN.
Yesterday one opened with "Uranium, uranium, uranium" and then mentioned old news regarding 92E.
Maybe things are just warming up.
The KAZ miss was important. Cameco, the worlds 2nd largest producer, reports soon, that will be keenly watched.
Yeah, I see you’ve been posting on U for a while, well done getting in early.There's probably more money to be made but the easy money was made buying while it was hated 3 years ago. It's looking frothy. Maybe I'm just pissed selling BOE for a nice profit at $3 and not getting back in. Moron.
URNM and URNJ up over 7%. Should be a good day for our sector today. Feeling greedy and also think I should be taking profits. Vexed.
Yes I took profit off the table with PDN, as you say it is frothy and it takes a long time for demand to crank up, a reactor was built in a day.There's probably more money to be made but the easy money was made buying while it was hated 3 years ago. It's looking frothy. Maybe I'm just pissed selling BOE for a nice profit at $3 and not getting back in. Moron.
I sold PDN, IMO nuclear isn't going to happen overnight, so hopefully mid year there will be an opportunity to re enter, parked it in short term deposit ATM.This reminds me of people saying buy lithium when it was going parabolic.
When the AFR is saying buy, you're late.
Still money to be made, maybe.
View attachment 170473
I am toying with the idea of cashing some of the profits in the super portfolio, maybe selling 50%You know you've missed the easy money when the newspapers are going OTT on reporting about the uranium resurgence. But, it's still a thing. Just might not have the multibagger potential from 3 years ago. A couple of uranium plays might be missing the boat by not jumping to FID and getting their plants back up and running sooner. BOE and PDN the only two who have done well out of this. The likes of DYL, BMN, LOT have done extremely well with SP appreciation but dragging their heals on development and restart. May miss the boat if they don't get a wriggle on.
View attachment 172311
With nuclear power set to hit a record high next year, the race to restart – or launch – uranium mines is firing up, with these ASX stocks well on the way.
Despite a recent stutter, uranium prices have had a rapid rise over the past 12 months, finally breaking out of the Fukushima-shaped prison which had engulfed the nuclear energy market for more than a decade.
From lows of $US18/lb in 2018, prices more than doubled from January 2023 to 2024, hitting a 16-year high of $US107/lb.
Spot levels are more temperate at the moment, having slipped to $US93.50/lb in recent days. The blame has been most squarely placed on funds using the rapid rise in uranium prices to cash out profits, having played a big role in sparking the current uranium bull run by locking up pounds on the spot market that had previously been relied on by utilities to top up their supplies.
That would suggest the lull will be temporary. In any case, the spot price is now well above historic incentive levels of $US60/lb, and even the $US75-80/lb suggested by some miners to be the new incentive price, in the wake of recent inflation.
With nuclear power generation on the rise and last year’s decade high contracting of about 160Mlb failing to even hit replacement rates, miners have grown more bullish about their ability to plug new material into the market and develop U3O8 projects.
According to the International Energy Agency, nuclear power generation will reach an all time high in 2025, eclipsing a previous record set in 2021, while more than 20 countries signed a declaration at COP28 last year to triple their nuclear generating capacity by 2050.
Not everyone is a winner
The biggest risk is probably financing and construction of notoriously costly nuclear plants, but the delivery of new uranium projects is tipped to also be a handbrake.
Kazakhstan’s London-listed and state-backed Kazatomprom – the world’s largest producer – wants to return to its approved production capacity of 25,000tU, but will fall short over the next two years, thanks to sulphuric acid prices and availability.
Canadian giant Cameco wants to return its flagship McArthur River mine in Saskatchewan’s high-grade Athabasca Basin to its approved capacity of 25Mlbpa, from around 13.5Mlb last year.
Also stating its intention to develop Tier-2 assets in its portfolio “when the time is right”, the news sent shudders through yellowcake investors last month.
But it too has fallen short of production forecasts in recent times. McArthur was initially meant to deliver 15Mlb in 2023.
Smaller US players Energy Fuels and Uranium Energy Corp have flagged plans to boost domestic production amid concerns the country’s nuclear power plants are too reliant on material from Putin’s Russia, with local output having tumbled from 44Mlb in 1980 to just 174,000lb in 2019.
While a number of companies are likely to come to market asking for your hard-earned investment dollar, only a handful have demonstrated a credible pathway to production.
New miners will face challenges raising finance and finding staff and many still face approval risks with jurisdictions generally unsupportive of uranium mining.
But a number of ASX miners have outlined plans and even put dates on when they think they will be supplying to customers.
On the ASX currently, only BHP (ASX:BHP) is selling uranium, and that is a by-product of its Olympic Dam copper mine. But it is poised to get company.
There is no guarantee these projects will all get up and even less chance they will all meet expectations set out in their studies.
But ASX listed uranium companies – including and dominated by predominantly TSX listed NexGen Energy – are planning to add up to 60Mlb of annual supply to the market in the coming years.
I am toying with the idea of cashing some of the profits in the super portfolio, maybe selling 50%
Got boe and PDN so expect some real mining at some stageI had VMY - taken over by DYL. Sold half DYL twice. Sold out of BOE at 3 bucks lol. Added to LOT on the break up, waiting for over 40c to dump half. Will probably participate in the DYL CR. CRs seem to have been good for SP appreciation of late.
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