With demand on the rise, could uranium be the next lithium?

Interesting article in todays Australian with comments from AGE MD Greg Hall, and John Borshott CEO of DYL

The Russians are … not coming

Borshoff is one of a number of uranium executives who have pointed out the dramatic role Russia’s war in Ukraine could play in spurring an uptick in demand for yellowcake from Western jurisdictions.

Russia is a major enricher of uranium, and was responsible for around 30 per cent of supply of enriched uranium into the United States, the world’s largest market for nuclear electricity.

Within three years, those taps need to be switched off.

“Since ‘93 onwards, it’s been encouraged and utilities were encouraged to buy it to get that weapons material out of the market, which it has been very successful in doing so,” Alligator Energy (ASX:AGE) CEO Greg Hall said.

“But now all of a sudden, with the political turnaround and Ukraine situation, the US government has passed a law that says all nuclear utilities in the US have to phase out Russian supply over three years.

“So all of them are looking for a diversified supply. They’re interested in Canadian, in the US and Australian, in African supply.”

Supply out of Kazakhstan, one of the world’s largest producers, is also likely to be impacted because it has historically been transported through St Petersburg.

“Ultimately, that shift from Russian supply, 30 per cent of the US market plus a range of other utilities who were buying to other markets, means we’re all in a buoyant situation, with utilities wanting to talk to new suppliers,” Hall said.

“So it’s the right time to be looking for new supply into the market, with contracting from 2025-26 onwards, which is what we’re trying to do.”

Investor interest

Alligator (and Deep Yellow for that matter), which is advancing the Samphire project in South Australia, is one of a number of ASX-listed yellowcake explorers which counts influential Canadian insto Sprott Asset Management on its register.

Within the past three years, the historically gold-focused fund manager has pivoted strategy to nuclear energy, with almost half of the cash it has invested on the Aussie market in uranium equities.

Hall said major investors, some of whom either saw the uranium market as too weak or taboo to invest in previously, were increasingly pivoting to the sector.

It is a dramatic reversal of fortune for the commodity, which became a pariah after the Fukushima nuclear incident following Japan’s Tohoku Earthquake in 2011 and fell to decade lows of around $US18/lb five years later.

“We raised $30 million in capital last year, $22 million on placements and those placements were predominantly to major funds in US, Asia and Australia,” he said.