We’ve been hearing a lot about the economy is getting weaker, but don’t try convincing anybody in the uranium business about that.  They think the industry is moving onto the fast track and from their perspective they’re probably right.  In addition to the usual demands some new technologies are emerging quickly, and to put it mildly these companies are really power hungry.  And more and more it’s looking like uranium will provide much of that needed power.

Not all that long ago uranium was being shunned by governments, business, and investors because it was associated with major “incidents” – Three Mile Island, Chernobyl, and Fukushima being the most famous.  But this thinking is changing.  The latest nuclear-powered plants are smaller and believed to be safer.  And this has put the entire industry in a more favorable light.

CNBC’s David Faber recently asked U.S. Energy Secretary Jennifer Granholm how all the anticipated new AI data centers would be powered in the future along with the growth of generative AI.  “How is it going to mix out, given our power needs could be 20% higher than right now in a handful of years?” he asked her.

Granholm didn’t agree with his estimate of growth, but she did with agree with his point.  “The estimates (we have) are 15% higher within ten years as a result of both AI, as well as all the new manufacturing activity, and electrifying the transportation sector…We are going to need more power.  We are adding that power and adding record amounts of clean power.”

 

Power To You

More and more, powerful and influential people and companies think small modular nuclear reactors are the way of the future, and they include Constellation, America’s largest producer of clean energy, and tech behemoth Microsoft.  Both of them also support reopening the Three Mile Island power plant, which was closed in 1979 following a serious accident.  

According to Science Friday, a nonprofit organization that produces science news and educational content, “Tech giant Microsoft has made a deal with the nuclear site to reopen Three Mile Island and purchase all of its generating capacity over the next 20 years.  As Big Tech bets big on artificial intelligence, the need for electricity to power data centers is increasing tremendously.”

Granholm recently took this a step further, indicating that aside from Three Mile Island there will be additional nuclear plants that will produce power.  “We’ve got a ton of nuclear sites in this country that have been permitted for additional reactors that could be powering data as well,” she said.  

 

More Voices

Sam Altman, the CEO of OpenAI, very recently has urged the Biden Administration to support the construction of massive data centers, each consuming as much power as a city, to advance AI development and compete with China.  

According to Bloomberg, OpenAI wants to build 5-gigawatt data centers across several U.S. states – enough to power three million homes.  OpenAI said these data centers would create tens of thousands of jobs, boost GDP and secure U.S. leadership in AI.  These are very convincing arguments, and certainly will be given a great deal of consideration regardless of who wins the upcoming Presidential election.

Signs that a revival of nuclear power is underway are evident all over the place and are showing up more frequently.  According to The Epoch Times, “At least five shuttered uranium mines across four U.S. states have been reactivated in response to accelerating global demand for nuclear-powered electricity.” 

The latest mine that was reopened was made by Uranium Energy Corp. (UEC).  On Aug. 13, it announced the resumption of production at its Christensen Ranch recovery operation in Wyoming, and that it plans to begin shipping yellowcake—milled uranium oxide—from its nearby Central Processing Plant by December.  

The point here, is not that one mine or plant is reopening or even two, but rather the direction of the trend, and that clearly shows that the amount of power produced by nuclear plants is increasing steadily.  Currently there are 94 nuclear reactors up and running in 55 power plants, and combined they produce 20% of America’s electricity.  Still, it’s been a rocky road for nuclear.

According to The Epoch Times, a half-century ago the U.S. used to be the world’s largest uranium producer.  In 1980, domestic companies produced and processed 44 million pounds of yellowcake—about 90 percent of the uranium used by the then 251 nuclear power plants.  At that time, they generated 11 percent of the country’s electricity (data provided by the U.S. Energy Information Administration).  

In the following years this changed dramatically, and by the mid-1990s, U.S. nuclear power plants were increasingly importing less expensive uranium largely from Russia and Kazakhstan.

“Uranium extraction and processing in the United States—already hampered by stiff mining regulations, lengthy permitting processes, litigation, and high operations costs—was further derailed by the 2011 Fukushima disaster in Japan,” The Epoch Times adds.  

By 2021, only 5 percent of the uranium used by domestic nuclear power plants was produced here.  The rest of the uranium was supplied by a variety of countries and they included: Canada (27 percent), Kazakhstan (25 percent), Russia (12 percent), Uzbekistan (11 percent), and Australia (9 percent).  

 

Crucial Supplies

Russia’s February 2022 invasion of Ukraine convinced many leaders in the U.S. and the EU that relying on imported uranium from Russia and Kazakhstan was a bad idea.  And now bi-partisan legislation that was already passed or is working its way through Congress is intended to change all that.  

“Russia’s chokehold on America’s uranium supply is coming to an end,” Sen. John Barrasso (R-Wy.) told the Senate on May 8.  “Last year alone, our industry paid over $800 million to Russia’s state-owned nuclear energy corporation, Rosatom, and its fuel subsidiaries,” he said. “That number could be even higher this year and these resources are no doubt going towards funding Putin’s war efforts in Ukraine.”

Scott Melbye, Executive Vice President of U.S.-based Uranium Energy Corp echoed those thoughts.  “Production from stable jurisdictions is valued in today’s volatile world and has become a renewed priority in utility purchasing strategies.”

According to Melbye, when the U.S. led the world in uranium production 40 years ago most of that came from open-pit mines.  Now, he says, about 90 percent will be an improved technology called ISR (in-situ leaching).

The Epoch Times explains that in situ mining causes less surface disturbance in a smaller footprint, uses less water, and leaves no contaminated tailings or waste rock.

According to the July 1 issue of “The Crux Investor,” “Whichever analysis you look at, there is an overwhelmingly positive outlook for the uranium sector in the coming years.”

Those interested in investing in this sector can purchase shares directly, through ETFs and mutual funds, or options and futures.  Needless to say, some of these are exceptionally risky, so check with your financial advisor about which of these, if any, are suitable for you. 

Sources: bloomberg.com; crrucinvestor.com; sciencefriday.com; theepochtimes.com; wikipedia.org; zerohedge.com


Gerald Harris is a financial and feature writer. Gerald can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.