Uranium Report 2024/11 - Update
Microsoft has done it: the company recently became the first major tech group to secure an exclusive twenty-year purchase agreement with a nuclear power plant. From 2028, the operator Constellation Energy will supply Microsoft with CO2-free energy from Unit 1 of its Three Mile Island nuclear power plant (now Crane Clean Energy Center), which was shut down in 2019, for at least 20 years. Microsoft is forced to purchase baseload-free electricity in large quantities as the company is currently building large data centers with high energy requirements. The ongoing boom in AI technology in particular requires unimaginable amounts of energy and therefore uranium!
Many (emerging) nuclear power nations such as China, India, Japan, the UK, France and the USA are working on restarting, extending the service life or building new nuclear reactors, and many other nations have returned to nuclear energy or want to have their first reactor on their own soil. In the future, a large number of smaller reactors - so-called "Small Modular Reactors", or SMRs for short, which can be manufactured modularly in factories and installed at almost any desired location - will play a major role and ensure an unprecedented increase in demand.
Uranium supply, on the other hand, has been lagging behind demand for years and is slow to expand significantly, as there are hardly any established mines, and the commissioning of new mines can take many years. Many mines were closed at times of low uranium prices and cannot be restarted within days. New mines even need a lead time of over 10 years in some cases for approval and construction.
All in all, the utilities' warehouses, which were still well stocked a few years ago, are almost empty and the uranium spot market has dried up. The two largest uranium producers in the world, Kazatomprom and Cameco, have reported that their entire expected production has already been "sold out" by the end of 2025. At the same time, these majors in particular are having problems ramping up their uranium production as desired and have had to make massive downward adjustments to their production figures.
Cumulatively, there will be an estimated shortfall of 500 million pounds of triuranium octoxide (U3O8) by 2030 alone. For 2024, a supply of around 155 million pounds of U3O8 is expected, which will not even come close to meeting the demand for 195 million pounds of U3O8. This blatant undersupply of uranium opens up excellent opportunities for interested investors to participate in the uranium market. Some interesting investment opportunities can be found in this report.
