Uranium Report 2022/10 – Update 2
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Nuclear power is currently on everyone's lips. And this is not only the case in Germany, which tends to be a nuclear power-phobe, but also worldwide. In view of numerous unsolved problems regarding the current and future energy supply from sources that are as CO2-free as possible, as well as unsolved dependency scenarios - above all Europe's dependency on non-European gas - the almost emission-free generation of electricity by means of nuclear fission is experiencing a true renaissance. China is once again a step ahead here and is planning to build 10 nuclear power reactors per year. But India, soon to be the country with the largest population, as well as established nuclear power nations such as Japan, Great Britain, France and the USA are also working on recommissioning, extending the operating lives of or building new nuclear reactors which, as the only regenerative energy source, can constantly supply emission-free electricity at the same high level (see the box "Base load capability, what is it?"). In the future, the focus will no longer be on the familiar, large nuclear reactors, but on far smaller reactors that can be manufactured in factories on a modular basis and installed at almost any desired location. Several of these so-called "Small Modular Reactors" - SMRs for short - are already in the construction phase. Two of them are already in operation. It is precisely this flexibility that should ensure an explosion in demand in the future for the raw material that is essential for nuclear fission: uranium.
Nuclear power has already received an additional boost from the European Commission's decision at the beginning of 2022 to give nuclear energy a "climate label" and to include it in the so-called Taxonomy Regulation, which is intended to stimulate billions of euros of investment in green energies. In addition, Russia enriches a good 45% of the world's uranium production and will now be out of business as a supplier for many countries. On the other hand, many uranium producers have sharply reduced their production in recent years and even acted as buyers themselves - alongside ETFs, funds and countries such as the USA. This has recently created a supply deficit of more than 50 million pounds of U3O8 per year. Accordingly, the inventories of many energy suppliers (utilities) have been exhausted, so that they now have to come back to the negotiating table and conclude new long-term supply contracts.
This naturally opens up excellent opportunities for interested shareholders to participate in the uranium market.