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Wednesday, Feb 12, 2025
Mugglehead Investment Magazine
Alternative investment news based in Vancouver, B.C.

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Trump tariffs complicate its own case for nuclear renaissance

The U.S. Geological Survey (USGS) removed uranium from its critical minerals list in 2022

Trump tariffs complicate its own case for nuclear renaissance
President Trump at the 2015 GOP debate. Image from Andrew Harnik via AP.

The Trump administration may have hit a snag in terms of cheaper nuclear energy with this round of tariffs, even as it agrees to a monthly reprieve.

Trump and Mexican President Claudia Sheinbaum reportedly reached an agreement early Monday morning, agreeing to a one-month pause on the tariffs. Canada announced a similar deal in the afternoon.

But if the pause expires and the U.S. imposes an additional 10 per cent tax on uranium and other Canadian minerals, nuclear power pursuers may need to start sourcing the critical nuclear fuel elsewhere. That may mean a return to Russian-backed sources, despite having disconnected from Russian uranium last year.

The U.S. Geological Survey (USGS) removed uranium from its critical minerals list in 2022, classifying it as a ‘fuel mineral’ that didn’t qualify. However, in the Jan. 20 “Unleashing American Energy” executive order, the Trump administration directed the Secretary of the Interior to instruct the USGS director to reconsider adding uranium back to the list.

Restoring uranium’s critical status would unlock federal funding and streamline permitting for U.S. uranium projects. Domestic uranium production has been rising slightly since the uranium oxide (U₃O₈) spot price hit USD$106 per pound early last year. Companies such as Energy Fuels (NYSE: UUUU) (TSE: EFR), Uranium Energy Corp (NYSE AMERICAN: UEC), and Cameco Corporation (TSE: CCO) (NYSE: CCJ) could benefit from the 25 per cent tariff on uranium.

The wrinkle is that rising demand for uranium clashes with Trump’s ‘America First’ policy, which prioritizes domestic commodity production, and the reality of where the U.S. sources its uranium.

Read more: Cameco JV stalls uranium production over bureaucratic holdup

Read more: Skyharbour Resources to acquire Athabasca Basin uranium project from Denison Mines

US has attempted to reduce its reliance on Russian uranium

U.S. uranium production has plummeted over the past 25 years, dropping 96 per cent from 4.8 million pounds in 2014 to just 121,296 pounds in last year’s third quarter, according to the U.S. Energy Information Administration. Despite Trump’s pledge to impose 25 per cent import tariffs on Mexico and Canada, the U.S. sourced 27 per cent of its uranium from Canada in 2022. Another 57 per cent came from Kazakhstan, Uzbekistan, Australia, and Russia.

The U.S. has attempted to reduce its reliance on Russian uranium after the Biden administration banned imports under the Prohibiting Russian Uranium Imports Act. In response, Russia imposed its own uranium export restrictions last November, though it allowed exceptions for deliveries under one-time licenses.

Several U.S. companies, including Uranium Energy and Energy Fuels, have reopened sites in Wyoming, Utah, Texas, and Arizona after years of inactivity. Uranium Energy operates multiple in-situ recovery operations and, last September, secured a USD$175 million deal to acquire Rio Tinto Group’s (NYSE: RIO) (LON: RIO) (ASX: RIO) assets in Wyoming.

Energy Fuels, one of the largest uranium producers in the U.S., resolved a dispute this week with the Navajo Nation over transporting radioactive ore across its lands. The company will truck ore from its Pinyon Plain mine in northern Arizona to its White Mesa Mill in southern Utah.

Cameco produces much of its uranium in the Athabasca Basin in northern Saskatchewan and also operates the Inkai joint venture project in Kazakhstan with state-owned Kazatomprom. The joint venture resumed production this week after resolving a regulatory issue.

Read more: Department of Energy inks deal with six companies for low-enriched uranium

Read more: F3 Uranium finds high radioactivity during summer drilling campaign in Saskatchewan

Small modular reactor get funding boost

Despite prevailing political tensions, innovation in North America’s nuclear industry continue to pay dividends.

Core Power, a developer of floating nuclear technologies, announced Wednesday that it has hired marine engineering consultancy Glosten to design a barge-based nuclear plant to power U.S. ports. Glosten will also assess a potential regulatory path for the design and identify a supply chain to build it.

This project highlights the potential of small modular reactors (SMRs), which are cheaper and simpler to build and could boost uranium demand. However, BMO Capital Markets noted in a Friday brief that regulatory and scalability challenges remain.

Meanwhile, a Tennessee Valley Authority-led coalition has applied for an USD$800 million grant from the Department of Energy to accelerate SMR construction at Clinch River, the authority announced on Jan. 17.

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