Construction of nuclear power reactors underpins a secular growth in the demand for uranium. The uranium mining industry, however, is a bona fide cyclical industry. After a 10-year-old downtrend, uranium price may finally see light at the end of the tunnel, with major producers cutting production. Although the industry still needs to work off a large amount of inventory, it is time to look closer at opportunities in this interesting corner of the energy sector. This idea was discussed in more depth with members of my private investing community, The Natural Resources Hub.
Do you know that one uranium fuel pellet - about the size of your fingernail - produces the same amount of energy as 17 Mcf of natural gas, 149 bo, or 0.81 metric tons of coal? - Anonymous
Note: This article is the first in a multi-piece treatise on the uranium mining industry. In Part 1, I examine the demand-supply picture to locate where the uranium industry currently is in the cycle. In Part 2, I intend to study the competitive landscape of the uranium mining industry based on a database I have been building. Thereafter, I plan to establish a valuation framework and use it to select a number of investible targets, which will be examined in detail to come up with actionable investment theses.
According to International Atomic Energy Agency (IAEA), there are a total of 451 nuclear power reactors currently in operation, with 394,836 Mega Watts electric (MWe) of net installed capacity. There are an additional 58 nuclear power reactors that are under construction
Original URL: https://seekingalpha.com/article/4182229-uranium-mining-inflection-horizon?page=2
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