Yahoo Finance Nuclear-powered rally: Cameco, uranium stocks jump on Kazatomprom warning
Canadian uranium stocks rallied on Friday as the world's biggest miner of the nuclear fuel warned it may miss production targets for up to two years. The announcement by Kazatomprom is the latest sign uranium will be in short supply amid growing global demand for nuclear power.
In a statement on Friday, the mining company controlled by Kazakhstan’s government via its sovereign wealth fund said shortages of sulfuric acid and construction delays could impact production into 2025. Uranium produced by Kazatomprom accounted for 22 per cent of primary global supply in 2022, the company says.
“The exact impact on the company’s operational performance is now being assessed, and will be detailed in the upcoming production guidance for 2024 . . . which is expected to be released no later than 1 February 2024,” Kazatomprom wrote on Friday.
Shares of Saskatchewan-based Cameco (CCO.TO)(CCJ) climbed about eight per cent in late-morning trading. Canadian peers Denison Mines (DML.TO)(DNN) and NexGen Energy (NXE.TO)(NXE) saw their stocks rise about the same. Sprott Asset Management's Physical Uranium Trust (U-UN.TO) added about four per cent.
Kazatomprom’s warning comes as uranium spot prices have soared to highs not seen in decades.
At the same time, a growing list of countries are unveiling plans for nuclear power to play a critical role in expanding electricity production. Earlier this week, the U.S. Department of Energy announced plans to invest as much as US$500 million to boost domestic production. The UK government also recently announced plans for nuclear power expansion.
According to UxC data, utilities have a cumulative uncovered requirements of about 2.3 billion pounds through 2040.
“We won’t fix the looming supply deficit without building new uranium mines, something we haven’t done in 20 years,” Sprott CEO John Ciampaglia wrote in a recent blog.
“We don’t anticipate any major new mines to come online before 2030.”
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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