As we’ve covered recently here in Money Morning, uranium prices could be set for a breakout this year.
See for yourself. This is a chart of uranium futures from the past year:
Australia has the world’s largest deposits of uranium, with 34% of the global total. It’s the world’s third-ranking producer, behind Kazakhstan and Canada. But this could be set to change.
Uranium mine to reopen
Australia currently operates three mines, one of which (Beverley) is a part of the Four Mile project.
As you can see below, production is up significantly from 2013–14:
Source: World Nuclear Association
Limited production is due to a de facto ‘three-mine’ policy and lower uranium prices.
Crucially, however, the Honeymoon mine will reopen in 2019 — perhaps anticipating future price growth.
Below is a list of the locations and owners of the four most relevant mines:
- Olympic Dam (SA) — BHP
- Ranger (NT) — ERA subsidiary of Rio Tinto
- Four mile (SA) — Alliance Resources and Quasar Resources (joint venture)
- Honeymoon (SA) — Boss Resources
Big returns for uranium stocks
Boss Resources Ltd [ASX:BOE] is trading near its 52-week high of $.08, up from a low of $.038 in March of this year.
This represents more than a 100% return over the last six months.
Boss Resources came to the fore out of a deal with a Russian energy company called Rosatom.
Interestingly, Rosatom has inked a deal with China to help them with their new push towards nuclear energy.
China is projected to overtake the US in nuclear energy production in the coming decade.
The World Nuclear Association notes that by 2030, the Chinese will have 120–150 GWe of energy coming from nuclear.
If the price of uranium continues to climb, more previously closed mines may reopen to keep up with demand.
Money Morning will keep on top of this story as it develops.
For Money Morning
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