The United States government’s push to decarbonise the country’s power grid is expected to turbo-charge Australian uranium stocks, according to industry insiders.

Uranium stocks have performed well in recent weeks as fears of supply shortages grow.

This latest rally marks the second time in seven weeks uranium stocks have captured investors’ attention after almost all 40-odd companies linked to the yellow metal notched up gains in December.

The second rally coincided the passage of a bill in the US to establish a national strategic reserve of nuclear material.

Speaking on Stockhead’s Rock Talks series, Vimy Resources chief nuclear officer Julian Tapp said these developments bode well for uranium producers.

“The US utilities are around about one-third of the demand for uranium, but if you look at markets where uranium mines can test to sell their product, they’re well over 50% of the market,” he said.

“So positive moves to support nuclear in the US are very good news for anybody that wants to mine and sell uranium into competitive markets.” 

RockTalk: Uranium momentum shift – Biden presidency, political instability & green energy push from Stockhead on Vimeo.

Down under up on top

As at 2019, the US sourced most of its uranium from Canada (21%), and supplements this supply with further stock from Australia (18%), Kazakhstan (18%), Russia (15%), and Uzbekistan (9%).

But Mr Tapp noted that the US does not view all suppliers as equals and that while Australia currently supplies similar volumes of uranium to the States as Kazakhstan and Russia do, the lucky country is ranked higher within the supplier “hierarchy”.

“Places like Canada and Australia are absolutely at the top of the list in terms of security of supply,” he said.

“It won’t be disrupted by the Russian suspension agreement or sanctions on Iran, or anything else that could come and disturb the arrangements they’ve got. They see places like Australia or Canada as incredibly reliable suppliers.”

Marenica positive on decarbonisation

Murray Hill, CEO of ASX-listed uranium explorer Marenica Energy, said the global push to reduce carbon emissions make now a “fantastic” time for the uranium industry.

“Decarbonisation is gathering strong momentum,” he said during a presentation for Reach Markets’ fortnightly The Insider webinar series.

“And we need low carbon emissions power to fuel that decarbonisation bandwagon.”

Marenica Energy is currently advancing its exploration works in Australia and Namibia (where it hold the largest land package for nuclear fuels in the country) following a successful $5.4 million capital raise in 2020.

The company is prioritising work on its largest Namibian tenement, Hirabeb, where uranium mineralisation has been detected over a distance of 30 kilometres within a palaeochannel (a prehistoric riverbed).

“We now have the longer-term funding to pursue our exploration and development activities in Namibia and Australia,” Mr Hill said.

“These activities will be methodically planned to ensure the most efficient use of shareholders’ money with the view to getting the ‘biggest bang for our buck’,” he further added. 

Last year also saw Marenica complete a proof-of-concept study on its patented U-pgrade beneficiation process, which was developed in partnership with the CSIRO.

Testing of the process at Marenica’s Angela mine site in the Northern Territory resulted in a 77% reduction in acid use when processing uranium ore, potentially unlocking significant environmental benefits and operating cost savings.

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Sources:

• RockTalk: Uranium momentum shift – Biden presidency, political instability and green energy push
• First silver, now uranium — fears of supply shortages drive up yellowcake share prices
• The United States imports most of the uranium it uses as fuel
• ASX announcement: 10 December 2020
• ASX announcement: 29 October 2020
• Unlocking uranium resources by improving recovery