RE:RE:The Uranium numbers I watchThanks HVI. That is a very interesting question. Like all things Uranium the answer is not straightforward. Uranium is not only used for nuclear power - it is also a very strategic material for the US military. Nuclear powered aircraft carriers and submarines cannot operate without it and (of course) you cannot make nuclear weapons without it.
To have this resource heavily controlled by a foreign power is one thing - to have it essentially controlled by Russia is....well.....a bit on the silly side. The Democrats in the US clearly did not appreciate that by selling a major Uranium production company to the Russian state they were effctively handing strategic control of their military to the Russians. Petition 132 seeks to restore that by ensuring only domestic Uranium is used by US military and power plants. The latter is by far the heaviest user and the US has been purchasing a large aqmount of its Uranium from Kazakhstan.
However part of this is clearly to promote US uranium interests but the bottom line is the US cannot produce enough of its own Uranium to supply all of its 100 reactors. So if US utilities were not allowed to buy from overseas that would make a big problemm. Fortunately they have Canada as their northern neighbour so I am sure that any arrangement will exclude Canada.
The effects on stock prices if it is agreed to will be dramatic and it is worth investing into some of these US outfits for that reason. They will also benefit from the global upswing in Uranium price so you win twice.
I would favour those companies in the US that can turn on production quickly to take advantage of any US Uranium embargo. Energy Fuels is on my list but I have to take into account that they are priced in USD. But really all of the companies mentioned are worth taking a good hard look at. I would focus on those that are either already producing and can ratchet up supply quickly or those that are near production and can start capitalising on the situation. One of those is of course CCO which has two ISL mines in the USA and would benefit from an America Fisrt policy wrt Uranium.
It adds another really interesting twist to Uranium plays in the US. The result depends on whether President Trump applies America First to Uranium. It is a bit of a gamble but certainly could have some lucrative outcomes for the savvy investor.
Hope that helps
Malcolm
HVIBlow wrote: Hi Malcom,
I follow your posts since a few months and I must say that they are very interesting, you bring a lot of value to this board.
I would like to ask your opinion regarding the Petition 232 in the U.S., filled by Energy Fuels and UR-Energy.
It seems quite obvious to me that some sort of measures to help the U.S. uranium industry will be implemented, perhaps a quota as requested in the petition.
What do you think would be the impacts on the global uranium market if such measures are implemented ?
I see U.S. uranium producers selling uranium at a premium to U.S. utilities. It would also add more pressure on the global uranium prices, perhaps reducing it further.
Aren't you tempted to buy companies like UUUU, URG or UEC to benefit from this situation ?
I believe this event will happen first, and then, the supply/demand dynamics will kick-in and in 2020-2021, we will see the global uranium prices increase.
Your thoughts are appreciated here.
Thanks !