The demand for nuclear power is set to rise significantly not only from consumers in the Far East but also from domestic U.S. consumers as the adoption of cleaner energy continues. Uranium Energy Corp CEO Amir Adnani believes that by 2030, the People’s Republic of China will have more nuclear generation than the United States, which will significantly increase the demand for uranium and the profile for nuclear generation.
At the start of last week, uranium futures rallied to $50 per pound from the mid-August price of $30 per pound. The significant increase in price was mainly driven by various bullish fundamentals, with the Sprott Physical Uranium Trust Fund (“SRUUF”) being the main catalyst for the surge.
The uranium trust was launched earlier in the year and has so far bought more than 2 million pounds of uranium from the market. Analysts speculate that it could bring more investors into the uranium space, which will impose more demand upon the already tight market.
In an interview with Kitco News, Adnani stated that the entry of a player such as the uranium trust into the market accelerated what had already been developing, adding that the bigger picture was population growth. He explained that with the global population set to hit 9 billion by the year 2050 and more individuals living above the poverty line, the need for a quality of life and standard of life would require more electricity and uranium would be a welcome source of energy.
Uranium is a nonrenewable resource that generates power through the splitting of atoms to produce energy. Nuclear is a clean source of energy that produces energy without emitting greenhouse gases or polluting the air, unlike fossil fuels, which emit harmful byproducts into the atmosphere while generating electricity.
Adnani also dismissed claims by analysts that a physical uranium fund would boomerang on investors in the uranium market as better visibility of hidden uranium stocks could become an overhang to the metal’s market. In addition, he seconded what the World Nuclear Association has previously stated, that given the shortage of uranium, the development of uranium projects globally would have to increase in order to meet and satisfy the demand for nuclear energy in the next two decades. Adnani asserted that nuclear power was a cleaner and much safer alternative to fossil fuels, which not only emit carbon dioxide, which makes up most of the greenhouse gas emissions, but also lead to human casualties.
This projected increase in the demand for uranium is likely to favor the producers of this metal, including Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR), which have properties with extensive reserves of the mineral.
NOTE TO INVESTORS: The latest news and updates relating to Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) are available in the company’s newsroom at http://ibn.fm/UUUU
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