Uranium is a naturally occurring chemical element with the symbol U and atomic number 92. It is a heavy metal that is slightly radioactive and can be found in small amounts in most rocks, soils, and water.
Uranium is used in the production of nuclear weapons, as well as in some medical and industrial applications, such as radiation therapy for cancer treatment and in the manufacture of colored glass.
However, uranium is primarily known for its use in nuclear power plants, where it is used as fuel to generate electricity. The uranium used in nuclear power plants is usually in the form of uranium-235, which is a rare isotope of uranium that can undergo nuclear fission and release energy.
With rising electricity costs, countries and private corporations consider nuclear as the only renewable energy option that won’t take decades to scale.
Some analysts believe nuclear plants are the perfect long-term solution for renewable energy because they produce a copious amount of energy with almost no greenhouse gas emissions and lower costs compared with other forms of clean energy.
According to the International Atomic Energy Agency (IAEA), nuclear power will contribute 12% of global electricity by 2050. Hence, the uranium market is poised for a radical shift, making uranium a critical investment metal in clean energy.
For some, uranium offers excellent exposure to the clean energy gold rush. The growing interest has created several ETFs that hold physical uranium in licensed facilities, with the shares representing ownership of actual uranium. The Sprott Physical Uranium Trust is the largest, with about 60 million pounds of U3O8.
Sprott has a USD $2.8 billion market cap. It is the world’s third-largest uranium buyer, behind the U.S. and China. If such a small-cap fund is a already big industry player alongside two superpowers, it shows the uranium market is still untapped.
On the date of publication, Andy Mukolo did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
