Nuclear power is increasingly touted as a solution to the global energy challenge. Nuclear technology has come a long way in recent years and is now safer and cleaner. Here is a collection of stocks to watch as nuclear power drives interest in the uranium investment theme.
- Uranium Fuels is planning to start production at four uranium mines — at least one of them by early 2024.
- BHP could finally expand its Olympic Dam project in south Australia after plans had previously been shelved in 2020.
- Boss Energy plans to start mining activities at its Honeymoon project, also in South Australia, having acquired the mine back in 2015.
Energy Resources of Australia
The Mine Rehabilitation Stock
Energy Resources of Australia [EGRAY], a uranium business owned by Rio Tinto [RIO] warned investors in September that the cost of rehabilitating its Ranger mine will “materially exceed” the previously forecast range of A$1.6–2.2bn. Back in April, Rio Tinto said it would be buying A$319m of shares to help raise funds to clean up the former uranium mine, which closed in 2021. The Energy Resources of Australia share price has cratered 76.4% in the past six months and is down 55.4% in the past year.
The Mine Production Stock
Energy Fuels [UUUU] is preparing to start production at four uranium mines, at least one of them by early 2024, the company announced in its third quarter 2023 earnings on 6 November. Combined, these mines will have a capacity of 1–1.3 million pounds of uranium annually. CEO Mark Chalmers said that “significant tailwinds” including rising spot prices are “improving our expected contract sales prices, increasing the value of our significant inventories, and increasing the value of our resources”.
The Mine Expansion Stock
BHP [BHP] could finally expand its Olympic Dam project in south Australia. Plans were shelved back in 2020, but CEO Mike Henry told the Australian Financial Review in October that the “nuclear renaissance” and higher uranium prices could see money “flow back to making that expansion opportunity more economic”. While an expansion of the project’s smelter would significantly boost the miner’s copper output, it would also enable it to produce more uranium, added Henry.
The Mining Activities Stock
Boss Energy [BQSSF] started mining activities at its Honeymoon project in south Australia in October. Since acquiring the mine in December 2015, the company has carried out a series of technical studies to optimise production, which is now on track to start before the end of the year. CEO and Managing Director Duncan Craib hailed the development as a “pivotal milestone” that is “testament to the hard work and effort undertaken”. He added that the timing of production “is looking ideal, with the uranium market continuing to tighten and the spot price moving up”.
The Nuclear Services Stock
Cameco [CCJ], alongside Brookfield Asset Management [BAM], announced the successful acquisition of nuclear services company and power plant equipment maker Westinghouse on 7 November. Following the news, Cameco CEO Timothy Gitzel said that the company’s experience “is expected to provide a solid foundation for Westinghouse’s continued success in the provision of nuclear plant technologies”. Cameco’s share price has surged 53.4% in the past six months and is up 74.5% in the past year.
Another Way to invest in Uranium
The Global X Uranium ETF
The Global X Uranium ETF [URA] holds the Australian shares of BHP [BHP:AX] and Boss Energy [BOE:AX], and the Canadian shares of Cameco [CCO:TO] and Energy Fuels [EFR:TO]. The metals and minerals industry accounts for 76.7% of the portfolio, while industrial machinery, oil and gas production, precious metals and semiconductors all have single-digit weightings as of 31 October. The fund is up 32.1% in the past six months and up 23.7% in the past year.
The BetaShares Global Uranium ETF [URNM:AX] holds Boss Energy, Cameco and Energy Fuels. Coal and consumable fuels account for 92.1% of the portfolio, followed by trading companies and distributors (4.5%) and diversified metals and mining (3.3%), as of 29 September. The fund is up 49.6% in the past six months and up 35.2% in the past year.