Russia-U.S. tensions could lead to uranium export ban, causing uranium price to soar - Amir Adnani
|Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day's top stories directly to your inbox. Sign up here!|
(Kitco News) - Tensions between the United States and Russia over the invasion of Ukraine could lead to sanctions on Russian uranium, which would diminish the United States's nuclear power capabilities and send the uranium price much higher. That is according to Amir Adnani, who is President, CEO and Founder of Uranium Energy Corp (NYSE: UEC), the largest North American focused uranium company.
Speaking at the BMO Metals, Mining & Critical Minerals Conference with Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, Adnani pointed out that 20 percent of the United States's energy generation is from nuclear power, and that the U.S. produces very little uranium domestically. Most of the country's uranium is imported from Russia, Kazakhstan, and Uzbekistan.
"The U.S. is the largest consumer of uranium in the world," he said. "They consume 50 million pounds per annum. There is [almost] zero domestic production capabilities right now."
The U.S. Energy Information Administration states that in 2022, only 174,712 pounds of uranium were produced in the U.S. In 2020 and 2021, there was no domestic uranium mining.
Adnani, who has two decades of experience in the uranium industry, said that if the U.S. sanctions Russian uranium, or if Russia enacts an export ban, the results would "shake this market," causing "upward pressure" on the uranium price.
However, he said that the uranium price, which is currently trading at around $51 per pound, needs to reach at least $60 in order to make mining economically feasible.
"Many producers that are building new mines will need even higher uranium prices," he claimed. "Restart opportunities like ours [Uranium Energy Corporation's] will most likely work with that $60 hurdle, but I think prices will need to be well north of that for incentivizing brand new operations."
|Silver price to rise 1,000% as gold hits $5k by 2027, governments to "debase" their currencies - Rob McEwen|
To find out whether Adnani foresees uranium mines being vertically integrated with nuclear energy companies, watch the video above.
Fukushima Fears Fade
In 2011, the Fukushima Daiichi Nuclear Plant in Japan had a nuclear accident, causing the evacuation of 150,000 people from the Fukushima district. The fallout from the disaster caused the uranium price to crash from $136 to $50 within a year.
Recently, however, Japan announced that it is restarting many nuclear reactors in its existing fleet. Prime Minister Fumio Kishida is a supporter of nuclear power, and local polls in Japan suggest that 51 percent of the public support restarting nuclear power stations.
"More important than the political will that the Prime Minister demonstrated in Japan is that public opinion poll," said Adnani.
He suggested that as energy costs from fossil fuels rise, and as national security issues surrounding uranium become more salient, people will demand more nuclear power. Adnani also pointed to nuclear power's role in reducing carbon emissions.
"We genuinely need to decarbonize, and in order to make this green energy transition, we need to have access to low-carbon fuel sources like uranium," he said. "I have, in my twenty years in the uranium industry, never seen a setup this constructive and positive for our industry, and for nuclear energy."
To find out more about Uranium Energy Corp, watch the video above.