Uranium's future looking questionableThere's been a change in...

Uranium's future looking questionable

There's been a change in the wind for the uranium sector this week. The Obama administration gathered more world leaders together within US borders than at any time since 1942, when the UN was formed.

This time it was for this week's Nuclear Security Summit.

The idea is to get rid of any loitering nuclear material around the world in the name of world peace. There's still a great deal of weapons grade uranium out there, and that's not just the stockpiles in Russia. Countries like Canada, Chile, Ukraine and Mexico all confessed and agreed to get rid of it. The worry is that with so much uranium around, terrorists could access it and build a nuclear bomb.

Considering the number of politicians under one roof, it was surprising that anything was agreed upon, but it ended with a pledge by those present to collectively get rid of hundreds of thousands of tons of weapons-grade uranium in the next four years.

But how do you get rid of it?

The same way that Russia has got rid of twenty thousand warheads in the last sixteen years. By recycling them to produce lots of diluted reactor-grade uranium. This 'megatons to megawatts program' already provides 30% of the world's uranium.

With this week's pledge at the Nuclear Security Summit, it looks as though there is going to be plenty more recycled nuclear material hitting the uranium market in coming years. This is great for world peace, great for nuclear power-stations, but terrible for investors of uranium companies.

The increased supply is likely to send uranium prices down for some time. After creeping up in recent weeks, the prices have already fallen 1% to US$41 this week, as quote by Trade-Tech.

With the long term price of uranium looking questionable, the worry is that uranium miners may now be looking at a less profitable future.

From D&D