Quick Bites | Uranium price takes off as nuclear power ramps up

Anyone who follows Australian politics will know that the leader of the opposition, Peter Dutton, is pushing for nuclear energy to become part of the future energy mix for the country. For supporters, uranium offers a clean, reliable, renewable, and preferred option over fossil fuels. For detractors, there is the enormous up-front cost, time to bring to market, plus many associated risks. Whether or not the Coalition’s proposals succeed will only become evident in the years ahead, however, in many other countries, nuclear energy is making significant advances.

How can we tell? For one thing, it’s worthwhile keeping an eye on the uranium market and its underlying price.

Since early 2020, uranium prices have skyrocketed as interest in non-fossil fuel energy alternatives has spurred a surge in reactor infrastructure, mainly driven by new projects in China and India. Bloomberg reports that globally, 61 new nuclear plants are currently under construction, more than 90 plants are in planning, and an additional 300 or so plants are being proposed. After a decade of under-investment, China and India are doubling down on nuclear output, which appears to have boosted the price of uranium and incentivised major suppliers to join forces in a bid to meet soaring demand.

This places Australia uniquely, as it is ranked 1^st globally in terms of size for uranium resources, and 4^th for world supply. Australia generated $812m in export earnings from uranium in 2022-23, with forecasts recently revised upwards to $1.6 billion in 2024–25. Longer term export earnings forecasts have also been revised up for 2027–28 to $2 billion due to the stronger expected pricing environment.

Source: Chartr