So far in 2017 alone, about 60 new nuclear reactors are being constructed in 14 countries. Global nuclear power capacities are projected to increase from 380 Gigawatts in 2015 to over 480 Gigawatts in 2030, which is 10 Gigawatts more in 15 years. Likewise, uranium demand is projected to grow more than 60% from 190 million pounds of U308 in 2016 to 300 million pounds of U308 by 2030.
This is on top of the 447 nuclear reactors already operating in 31 countries, generating electricity that supplies about 11% of the world’s power requirements. The principal drivers of this nuclear capability expansion are China with 21 reactors under construction; Russia with 7; India with 5; the United States and the United Arab Emirates with 4 each; and South Korea with 3. The World Nuclear Association (WNA) also reports that around 223 reactors are either under construction or planned and an additional 350 reactors are proposed.
A Rosy picture is it not?
But is there more to this for investors?
Well, obviously so, and so much more we contend. As the data above suggests, companies engaged in the Uranium business may be in the early stages of a potential bull market cycle. One that may be more explosive than the run we saw from 2003 to 2010 when spot Uranium shot up by more than 130% from $10 per pound to over $130.
This comes at a rather opportune time with the very recent discovery of the USS Indianapolis – almost forgotten by history and lost in the depths of the Philippine Seas. The USS Indianapolis perhaps carried out the most significant mission for World War 2 – she was to drop off supplies in Pearl Harbor for Little Boy – that bomb that destroyed Hiroshima & Nagasaki.
And so, after 72 years and with a research vessel funded by Microsoft’s Paul Allen, the USS Indianapolis is about to share her secrets as much as reveal the undisclosed cargo that she was about to deliver [or had already delivered?] that day it got torpedoed – which was then just half of the world’s supply of Uranium 235.
Also coming out as profiting largely from the above favourable event is a little company with a technology that can extract Uranium from the deepest bowels of the earth; like sucking juice from a straw. Unlike the more traditional uranium mining companies, it can do the job with far less cost which is at most 80% less than the average to activate a deposit. So rather than spending US$500 million, it can mine the ore with less than US$10million. This game changing mechanism for uranium mining is very similar to the fracking revolution we saw in recent years back.
Early in this game, wagers have already been placed for an upcoming explosive bet. When we enter what looks like a massive bull super cycle for businesses engaged in Uranium, stocks in the energy sector with a substantial interest in its supply will enjoy the leverage from soaring Uranium prices.