• The world is waking up to the fact uranium is hard to find, secure and produce as the price continues to trade near 15-year highs
  • There are currently 60 nuclear reactors under construction across the globe
  • As always, junior miners are rushing in, hoping to make a uranium discovery and capitalize on the boom

Throughout the world, few countries are as dependent on uranium as France. Nuclear energy accounts for about 62% of its total electricity generation. So, as uranium prices trade near $100, the highest level since 2007, France is uniquely suffering under the weight of soaring uranium prices.

France has a whopping 56 operational nuclear power reactors – making it one of the world’s largest users of nuclear power.

Many large economies, from Sweden at 29% to South Korea at 30%, depend on foreign uranium for their nuclear power plants for electricity generation.

France has historically been dependent on three nations for its uranium. In a recent video, Alex explains why France’s power supply could be vulnerable as its sources of uranium may not be as reliable as they once were.

Soaring Demand for Uranium to Boost Prices Further

Despite the surge in uranium prices, many countries are rushing to build more nuclear power plants. About 60 power reactors are under construction in 17 countries, with an additional 110 reactors planned and over 300 more proposed.

The expansion of nuclear energy is part of a broader trend to meet electricity demands while combating climate change by reducing greenhouse gas emissions.

As investors focus on uranium prices, it would be wise to remember that several key metals and materials are required to build nuclear reactors.

To minimize corrosion, all surfaces that come into contact with reactor coolant are clad with a minimum of about 3 to 10 mm of austenitic stainless steel​.

The alloying elements added to these steels play a critical role in enhancing their properties:

  • Chromium increases hardness and strength, with a general concentration of about 2%, balancing hardness and toughness effectively. It is crucial for the hardening mechanism and contributes to strength at higher temperatures.
  • Nickel remains in solution in the ferrite phase, strengthening and toughening the steel without forming carbide compounds.
  • Molybdenum (0.50-8.00%) enhances the steel’s resistance to high temperatures, increasing hardenability and strength, especially at elevated temperatures due to its high melting point.​

Chromium is not cheap. In March 2024, the price range was between 64,000 and 72,000 CNY per metric ton – or nearly US$10,000 per ton.

Junior Mining Stocks Target Uranium Discoveries

Investors looking for leverage and a different kind of exposure to uranium are investing in small and micro-cap stocks. Stocks like NexGen Energy, which has seen a 30-day return of about 41%, highlight the moves a well-positioned name can have. Uranium Royalty Corp., Cypress Development, and Denison Mines are up over 20% in the past month.

But, there are many junior mining stocks, also known as exploration stocks, which have yet to discover a sizeable uranium deposit. These equities are amongst the riskiest to own…

…but with that risk also comes the potential for outsized returns if the junior miner can make an extensive and rich mineral discovery of a metal in high demand.

The lengthy timeline from discovery to production is another critical issue facing all mining companies. As cycles of demand change on a dime, companies can be left vulnerable without reaching their ultimate goal of production or development. Aaron explains some of the risks with junior miners and the mindset shift speculators need in today’s environment.