Uranium is booming, and Canada must seize the bull by the horns – by David Morrison (Globe and Mail – May 29, 2024)


David Morrison is the chief executive of Eight Capital, one of the largest independent investment banks in Canada.

Earlier this month, the U.S. Senate passed legislation to ban Russian uranium imports, and President Joe Biden signed off on it. The ban involves a phase-in period, until the end of 2027, to allow domestic production and supplies from allies to ramp up. Given that Russia supplied the U.S. with roughly a quarter of its uranium needs in 2022, this is no small task.

According to U.S. officials, Washington is counting on Canada to step up and fill the gap. We have just three years to prepare – less if the Russians retaliate by pre-emptively restricting their exports. Our usual glacial pace will not cut it.

Even before this ban was considered, uranium had already been hurtling toward an inflection point. With the surge in demand for low-emission, reliable nuclear power, paired with a prolonged drought in the development of new mines, uranium catapulted into the investor spotlight over the past year. Prices have risen from US$30 a pound in 2021 to almost US$100 today.

But investors would be mistaken to read the 75-per-cent price increase over the past year alone as a simple boom. It’s becoming increasingly evident that uranium, much like oil in the 1970s and copper in the early 2000s, is setting a new floor price that will redefine its market. The days of cheap uranium are over.

For the rest of this article: https://www.theglobeandmail.com/business/commentary/article-uranium-is-booming-and-canada-must-seize-the-bull-by-the-horns/