One of the world’s most hotly debated commodities, uranium, is back in the headlines since the price has dramatically increased in the last couple of years.
Since the beginning of January 2020, the uranium spot price has increased from sub US$24/lb to refined uranium touching US$86/lb in April 2022. The significance of this is the fact that many nuclear plants even in Australia require uranium to be over 30 dollars a pound to make any sort of meaningful amount of margin.
Since the geopolitical tensions in Eastern Europe and the limiting of Russian gas supplies have really provided an uptick in energy and subsequently uranium demand. Despite Australia’s hesitance to adopt the refinement of nuclear energy we actually have the world’s largest reserves of uranium and are the world’s fourth largest uranium exporter. Two uranium mines operate here – BHP’s Olympic Dam and Heathgate’s Beverley facility, both in South Australia.
Following on from this, our stock of the week is Paladin Energy (ASX:PDN). Paladin operates and develops various uranium mines in Africa, Australia and Canada. Its flagship project is the Langer Heinrich mine located in the Namib Desert in Namibia, which is one of the lowest cost plants globally and is due to restart production in FY24.
They also have exploratory projects in Western Australia, Queensland and Canadian operations with Aurora Energy, one of its wholly owned subsidiaries.