Ann: West Wits advances exploration work on Uranium at WBP, page-14

Uranium takes the spotlight as COP26 and the energy crisis collide

World leaders - most of them, anyway – will soon be heading to Glasgow for the United Nation’s Climate Conference, otherwise known as COP26.

The idea is that there will be commitments to accelerated net zero emission targets to save us all from global warming through decarbonisation and the electrification of everything.

Quite reasonably, there is an expectation that the role of nuclear power in the decarbonised energy mix required to stop global warming needs to be more prominent than in previous climate conferences - that's if the hurried-up zero emissions targets likely to emerge from COP26 are to be taken seriously.

That is certainly the way Guy Keller sees things. Keller is a portfolio manager at Tribeca’s Nuclear Energy Opportunities Fund, with the fund riding the recovery in uranium prices to post a 170% return net of fees for the year-to-date.

“The reality is that the only technology that is currently available to replace coal and gas-fired power as base-load power is nuclear,” Keller told a webinar during the week, hosted by NWR Communications.

Base-load is the important compound word there because nuclear power has upwards of 90% availability compared with 25%-35% for ever-intermittent wind and solar.

Japan, the US, Britain and France have all been saying positive things about nuclear power in the lead up to COP26, and more from them can be expected before the conference is over. So much so that, like lithium before it, flat growth curves for nuclear power are increasingly being replaced with steeper curves to the upside.

That is all supportive of uranium prices which have been on a tear this year anyway, thanks to physical buying by exchange-traded funds, and that to come from the new fund Kazakhstan is working on.

The latest (spot) uranium price of $US47.5/lb is close to a seven-year high, with more ETF buying and the likely COP26 endorsement of nuclear power providing upside potential. The real price kicker will be when power utilities return to the market in a big way to secure long-term supplies.

They must be getting nervous about the ETF’s mass sequestering of uranium. The sequestering is based on the view that prices of more than $US60/lb are required to incentivise the uranium miners to invest in the new production required to meet long-term demand, with or without high-growth scenarios in place.