New York, 10 January 2024 (TDI): Uranium mining companies’ stock prices increased worldwide because the United States announced that it is seeking proposals to increase its nuclear fuel production. This move aims to strengthen the country’s energy security.
The US Energy Department is asking American companies to submit proposals for making a specific fuel called high-assay low-enriched uranium, or HALEU. They announced this on Tuesday. The department intends to invest up to $500 million in these projects and other efforts to turn HALEU into chemical materials used in nuclear fuels.
After the announcement, uranium mining companies in North America, such as Global Atomic Corp. and NexGen Energy Ltd., saw an increase in their stock prices. Similarly, Australian counterparts like Paladin Energy Ltd. and Deep Yellow Ltd. experienced significant gains on Wednesday due to the expectation of higher uranium prices. In London, Yellow Cake Plc, a uranium investment firm, reached a record high as trading began, building on last year’s 65% increase.
The Biden administration is putting more effort into increasing uranium enrichment. This comes after the US House approved a bill that, if it becomes law, would prevent imports of enriched uranium from Russia, which is the country’s main foreign supplier of this material. Even though the bill is currently pending in the Senate and would only become effective later in this decade if it became law, it has sparked a renewed rise in prices for raw nuclear fuel.
A Russian government-owned uranium company had cautioned its American customers that if the US lawmakers approved certain legislation, the Kremlin might block exports of its nuclear fuel beforehand. However, the parent company, Rosatom, denied that its subsidiary, Tenex, had issued such a warning.
On Tuesday, the futures that follow the current prices for raw uranium, specifically the type called yellowcake, reached their highest level in 15 years. These prices more than doubled last year because Western initiatives to enhance energy security and reduce emissions led to a global resurgence in nuclear energy.
“The global pivot back to nuclear energy creates opportunities and challenges,” John Ciampaglia, chief executive officer of Sprott Asset Management, said earlier this month. “We need to rebuild supply chains that have long since disappeared.”