The last two decades have seen the US has cede its position as the world leader in nuclear energy. Russia and China have filled the void. This was the viewpoint of Dan Brouillette, U.S. Secretary of Energy, as highlighted in an article in Defense One. Efforts to restore US leadership in nuclear energy are being undertaken.
We believe that these efforts help to underscore our bullish outlook for nuclear energy and uranium.
Restoring US Leadership in Nuclear
To revive America’s nuclear energy industry and restore our competitive advantage, the US launched the Nuclear Fuel Working Group. The product of this whole-of-government effort, the “Strategy to Restore American Nuclear Energy Leadership,” was released by the Department of Energy last month.
The strategy proposes a series of actions to enhance nuclear power as a firm baseload source of energy that is clean, reliable, resilient, safe, and sustainable in an evolving energy landscape; revive our uranium mining, milling, and conversion industries; strengthen American technology supremacy; and drive U.S. exports of advanced nuclear reactors and fuel technology.
Underpinning the entire strategy is the acknowledgment that our national security depends on a robust nuclear-energy industry.
Roadmap to Restoration
First, the proposed strategies will rewrite foreign-policy relationships. Countries looking to pursue nuclear energy to fill their energy needs are turning to China and Russia for technical assistance. The working group’s proposed strategies hope to increase American competitiveness in new markets by making it easier to export civil nuclear technologies, equipment, and fuel.
Second, the working group’s strategy aims to prevent an increase in nuclear weapons around the globe. The ability to influence global non-proliferation, nuclear security, and safety standards is dependent on our credibility in the international reactor export market, according to the working group.
Increasing Domestic Uranium Production
Additionally, the long-term ability of the US to build new nuclear warheads and to fuel its submarines and aircraft carriers depends on the domestic production of uranium. Foreign suppliers are prevented from supplying this element for military purposes.
We have already written about the working group’s recommendation to create a domestic uranium reserve.
Additional Investment in Technology
The working group’s strategy also calls for funding advanced research, development, and deployment of America’s next generation of nuclear energy technologies.
US national security may depend on a strong, robust nuclear energy industry. Efforts to restore US dominance in nuclear technology can bolster both domestic and international development of nuclear energy and the building of new reactors. This has the potential to increase the demand for uranium. At the same time, the creation of a domestic uranium reserve may remove supply from the market. These developments have the potential to bolster uranium prices.
How may investors gain access to uranium and uranium miners?
The North Shore Global Uranium Mining ETF (URNM)
The North Shore Global Uranium Mining ETF (URNM) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the North Shore Global Uranium Mining Index (the index).
By seeking to replicate the index, URNM looks to provide investors with access to both miners and holders of uranium.
 Brouillette, Dan, Our National Security Requires a Stronger Nuclear-Energy Industry, Defense One, 5/28/20
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Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Market price returns are based upon the midpoint of the bid/ask spread at 4:00 PM Eastern time and do not represent the returns you would receive if you traded shares at other times. The first trading date is typically several days after the fund inception date. Therefore, NAV is used to calculate market returns prior to the first trade date because there is no bid/ask spread until the fund starts trading.
Commodity prices may be influenced or characterized by unpredictable factors, including high volatility, changes in supply and demand relationships, weather, agriculture, trade, changes in interest rates and monetary and other governmental policies, action and inaction. Uranium Companies may be significantly subject to the effects of competitive pressures in the uranium business and the price of uranium. The price of uranium may be affected by changes in inflation rates, interest rates, monetary policy, economic conditions and political stability. The price of uranium may fluctuate substantially over short periods of time, therefore, the Fund’s share price may be more volatile than other types of investments. In addition, they may also be significantly affected by import controls, worldwide competition, liability for environmental damage, depletion of resources, mandated expenditures for safety and pollution control devices, political and economic conditions in uranium producing and consuming countries, and uranium production levels and costs of production. Demand for nuclear energy may face considerable risk as a result of, among other risks, incidents and accidents, breaches of security, ill-intentioned acts of terrorism, air crashes, natural disasters, equipment malfunctions or mishandling in storage, handling, transportation, treatment or conditioning of substances and nuclear materials.