Nuclear Power Reimagined: Opportunities in Uranium
16 January 2025
Why Nuclear Energy Is on the Rise
Recent geopolitical and economic factors have made nuclear energy increasingly attractive. Being largely carbon-free and operational around the clock, nuclear power offers a stable and sustainable alternative to intermittent renewable energy sources like wind and solar. According to the International Atomic Energy Agency (IAEA), 59 nuclear reactors are currently under construction worldwide, with innovative small modular reactors (SMRs) leading the next phase of nuclear development.
Meanwhile, in the United States, major tech companies such as Microsoft and Amazon have signed long-term agreements to purchase nuclear-generated energy to meet the immense electricity demands of AI data centers and ensure low-carbon operations. In Europe, local governments extended the operational lives of 75 out of 109 reactors initially slated for decommissioning, further driving demand for uranium.
Number of Nuclear Reactors Under Construction by Country (2024)
Source: IAEA
Uranium Prices: A Barometer of Industry Demand
Uranium prices have surged in recent years, reflecting growing demand. Spot prices tripled from 2020 to late 2023 before stabilizing in 2024 at around $80/lb. Following the Fukushima disaster in 2011, uranium prices had experienced a significant decline, driven by global concerns and public sentiment against nuclear energy. However, since the early 2020s, renewed interest in nuclear power has sparked a recovery in prices.
Uranium Price Trends: Spot prices peaked at $100/lb post-2022, reflecting supply disruptions and demand surges.
Source: Cameco
Bridging the Supply Gap
Currently, global uranium demand outpaces primary mining supply. Secondary supplies, including stockpiles and inventories, have helped bridge this gap, but their availability is limited. Looking ahead, mothballed mines, such as Canada’s McArthur River Mine—the world’s largest high-grade uranium mine—are being reopened to address supply deficits. However, developing new mines remains a long-term endeavor, requiring 10–15 years of preparation.
Fueling the Future: Uranium’s Strategic Importance
As nuclear power undergoes a renaissance, driven by technological advancements, geopolitical shifts, and increasing energy demands, uranium stands at the heart of this transformation. For investors, the sector presents compelling opportunities—from participating in the mining boom to investing in innovative technologies shaping the nuclear industry’s future. With global efforts to achieve net-zero emissions accelerating, nuclear energy and uranium are poised to play pivotal roles in the energy transition.
Supply and Demand Forecast (2024–2034): Despite efforts to ramp up Uranium production, a supply gap is expected to persist, emphasizing the need for greenfield projects to close the gap. Spot uranium prices are forecasted to remain elevated, reflecting sustained demand growth and constrained supply chains.
Source: Bloomberg, VanEck analysis. Historical performance is not indicative of future results.
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This is a marketing communication. Please refer to the prospectus of the UCITS and to the KID before making any final investment decisions.
This information originates from VanEck (Europe) GmbH, which has been appointed as distributor of VanEck products in Europe by the Management Company VanEck Asset Management B.V., incorporated under Dutch law and registered with the Dutch Authority for the Financial Markets (AFM). VanEck (Europe) GmbH with registered address at Kreuznacher Str. 30, 60486 Frankfurt, Germany, is a financial services provider regulated by the Federal Financial Supervisory Authority in Germany (BaFin).
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