Why Uranium and Cobalt Stocks Could Be Smart Plays

Despite Australia’s current energy policy vacuum, it’s still possible to see which direction international energy policy is heading.

One of the main challenges for international energy policy is dealing with how people want their power produced.

We have previously covered the construction of a large number of new reactors and what this means for Australian uranium stocks.

Nuclear power to increase means demand for uranium

Confirming this, a recent UN climate change report has found that nuclear power will become a growing part of the energy mix by 2050.

A recent MIT report backs this up by arguing that:

‘Heightened awareness of the social, economic, and environmental risks of climate change and air pollution has provided a powerful argument for maintaining and potentially increasing nuclear energy’s share of the global energy mix.’

But with significant growth of nuclear reactors in the developing world, the nuclear debate remains ‘constrained by social acceptability in many countries,’ according to the report.

The good news is that, whether people choose nuclear or other sustainable sources of energy, or both, you can still profit.

The UN report looks at a number of ‘pathways’ in the international energy mix.

Let’s look at option one:

As the report notes: ‘Nuclear power increases its share in most 1.5-degree pathways by 2050’.

So if we are to halt climate change by 1.5 degrees, more nuclear power is necessary.

This would undoubtedly be a boon to uranium stocks.

We have a fantastic free report on uranium’s comeback which is available here.

If nuclear power is not used cobalt stands to gain

Now for option two:

Australia and the rest of the world opts to reduce its emissions without nuclear.

This would be folly, but were it to happen, there is a great way to think about this from an investing perspective.

Namely, start considering what goes into batteries.

As a recent report by MIT on the future of nuclear power notes:

‘[Our] results also indicate that meeting deep decarbonization goals without nuclear as an option will require a very substantial expansion of renewable and battery storage capacities, leading to significant cost increases.

As covered previously, the lithium-ion batteries that store renewable energy need cobalt — a resource that is plentiful in Australia.

If you think this scenario could play out, there is great free list of cobalt stocks available here.

Most likely scenario could involve both cobalt and uranium

Finally, consider option three — which may be the most likely.

That is, the developing world opts for nuclear (as is already happening), while the developed world needs more massive battery units of the kind operated by Tesla in South Australia.

In this scenario, both uranium and cobalt demand increases.

Perhaps it would be wise to consider the third option as it covers both bases.

Whatever option the world chooses, there is always an angle that nets the shrewd investor profits.


Ryan Clarkson-Ledward,
Markets & Money

PS: Lithium is essential for lithium-ion batteries, which we also have a free report on, available here.

Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan is also the Editor of Australian Small-Cap Investigator, a stock tipping newsletter that hunts down promising small-cap stocks by dissecting the latest events affecting the world.

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