Uranium market report from UAE investment bank puts nuclear stocks in the spotlight

Companies like Kazatomprom and Cameco are becoming increasingly essential

Rowan Dunne

Published

3 hours ago

The nuclear energy sector is in the midst of a powerful resurgence as AI and other factors continue to make electricity demands surge and world governments push for clean reliable power.

A new report published by United Arab Emirates-based financial firm Teniz Capital on Jan. 29 has highlighted this growing demand for atomic energy and uranium. Dubbed “The Uranium Renaissance,” it highlights that uranium demand is set to increase by 28 per cent within the next four years and double by 2040.

This growth is attributable to the COP 28 commitment to triple nuclear capacity by 2050 combined with escalating demands from artificial intelligence and the data centres it requires.

“The most powerful short-term driver is the explosive growth in data centre energy consumption related to AI development,” the report states.

Currently, primary uranium production only covers 74 to 90 per cent of current reactor requirements. Prolonged underinvestment has depleted secondary supplies like commercial stockpiles and reprocessed fuel. This depletion has shifted uranium from a cyclical commodity into one that is structurally constrained and bound for a multi-year bull market, as highlighted by the report.

Teniz Capital has stressed that the deficit will be difficult to resolve in the near-term. New mine development can take 10 to 15 years and physical limits on ramp up remain prevalent even when the price of uranium is high. The radioactive commodity hit US$106 per pound in early 2024, stabilized around US$76 for a time, and is now hovering at approximately US$95 after gains this month.

Small modular reactors add further upside because of their deployment potential in remote, industrial or grid-constrained areas. In future years, their usage could accelerate demand even more.

The world’s reliance on Russia for uranium conversion is also concerning for increasing supply deficits. If geopolitical tensions should escalate with the global superpower, international availability would become even more scarce.

Kazatomprom is in a unique position

One of the reports key findings is that this Kazakh uranium producer, the world’s largest, is an irreplaceable asset for the industry.

“The key investment thesis for Kazatomprom goes far beyond current financial indicators: there simply are no projects in the world capable of replacing Kazakhstani volumes in the next 20 years,” the report highlights.

The state-owned behemoth, known as Joint Stock Company National GDR (OTCMKTS: NATKY) (FRA: 0ZQ) on the public markets, accounts for almost 40 per cent of global uranium production and holds the world’s largest resource base. There are no realistic or comparable alternatives that can match its scale, cost structure or role in the nuclear fuel chain over the next 20 years, Teniz Capital has explained.

Investors can also gain exposure to Kazatomprom through buying stock in Canada’s leading producer Cameco Corp (TSE: CCO) (NYSE: CCJ) (FRA: CJ6). These companies have a joint venture at Inkai — one of the largest in-situ recovery uranium operations in Kazakhstan.

Exchange traded funds that are worthy of consideration for potential future gains include the Sprott Physical Uranium Trust (OTCMKTS: SRUUF) (TSE: U.U), Sprott Uranium Miners ETF (NYSEARCA: URNM) and the Global X Uranium ETF (NYSEARCA: URA). They track major miners and producers and offer exposure to a broad industry base. Sprott accumulated 72 million pounds of physical uranium in 2023 and 2024, as mentioned by Teniz in the assessment.

Sprott Uranium Miners ETF ( $URNM) Explained

URNM is a pure play uranium ETF that tracks the North Shore Global Uranium Mining Index.

It focuses on companies with at least 50% of assets in uranium mining, exploration, development, production, physical uranium, or royalties.… pic.twitter.com/2Fr16EcO7K

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