How can Aussie investors seize opportunities in nuclear energy and uranium resources?

Moomoo News AU joined discussion · Jan 9 17:35

Benefiting from the AI boom, nuclear power stocks kicked off 2025 with a surge. Throughout 2024, they performed strongly. Advanced nuclear reactor developer $NANO Nuclear Energy (NNE.US)$ soared over 522%, while small modular reactor developer $NuScale Power (SMR.US)$ rose over 444%, and $Oklo Inc (OKLO.US)$ climbed over 101%. U.S. power plant $Vistra Energy (VST.US)$, $Talen Energy (TLN.US)$, and $Constellation Energy (CEG.US)$ also saw significant gains, increasing over 263%, 214%, and 92% respectively.

How can Aussie investors seize opportunities in nuclear energy and uranium resources?

Strong Electricity Demand Boosts the Promising Outlook for Nuclear Power

Data from the U.S. Energy Information Administration (EIA) shows that the relatively stable electricity demand in the U.S. over the past decade is expected to gradually increase in 2024 and 2026, with the country's electricity consumption growing at an average annual rate of 1.5%.

The development of large models in the tech industry and the expansion of data centers have fueled this growth in electricity demand, as training large models and generating content are both highly energy-intensive processes. Nuclear power is currently the only zero-emission, carbon-free source of electricity that can operate around the clock. It can reliably provide up to 93% of its maximum power output annually without producing carbon dioxide. Its reliability is four times that of solar power and three times that of wind power.

Tech giants are not only facing strong electricity demand but also have certain emission reduction targets to meet, leading them to increasingly invest in the nuclear power sector to ensure a stable energy supply for their data centers.

$Alphabet-A (GOOGL.US)$ has signed an agreement with nuclear startup Kairos Power, which will build seven small modular nuclear reactors to power Google's data centers.

$Amazon (AMZN.US)$ has invested over $500 million in the nuclear power sector, while $Microsoft (MSFT.US)$ announced an agreement with Constellation Energy to restart the Three Mile Island reactor, which was shut down in 2019, and purchase electricity from it for the next 20 years to power its data centers.

Nuclear Stocks Set to Soar: What Investment Opportunities Await in the U.S. Market?

1. Upstream: Materials and Processing

The upstream supply chain primarily involves the supply of basic raw materials, key equipment, and nuclear fuel required for nuclear energy development, mainly including uranium mining and uranium enrichment.Specifically, uranium mining includes $Cameco (CCJ.US)$, $Uranium Energy (UEC.US)$, $Energy Fuels (UUUU.US)$, $Denison Mines (DNN.US)$, $NexGen Energy (NXE.US)$; Nuclear fuel processing $Centrus Energy (LEU.US)$.

2. Midstream: R&D and Manufacturing

$NuScale Power (SMR.US)$ is the first publicly listed SMR nuclear power plant manufacturer, with its core product being the SMR power module.

$Oklo Inc (OKLO.US)$ focuses on developing small modular reactors (SMR) and has received investment from Altman, known as the "father of ChatGPT".

$NANO Nuclear Energy (NNE.US)$ specializes in developing small modular reactors, focusing on four SMR-related areas including manufacturing, fuel, transportation, and more, aiming to create a diversified vertically integrated supply chain.

3. Downstream: Operations, sales, and waste disposal

The downstream mainly involves nuclear power plant operations and energy supply, with participants including $Constellation Energy (CEG.US)$, $Vistra Energy (VST.US)$, $Southern (SO.US)$, $Exelon (EXC.US)$, $Duke Energy (DUK.US)$, $Entergy (ETR.US)$, $Public Service Enterprise Group (PEG.US)$.

Additionally, electrical power equipment include $GE Aerospace (GE.CA)$, $Eaton (ETN.US)$, $Honeywell (HON.US)$, $Emerson Electric (EMR.US)$, $Graham (GHM.US)$.

Uranium Resources Rising: What Investment Opportunities Await in the Australian Market?

Uranium is the core component of nuclear fuel, which powers nuclear energy generation without emitting greenhouse gases. Industry research indicates that by 2030, the demand for uranium from nuclear reactors will increase by 28%, and by 2040, this figure is expected to nearly double.

As global demand for nuclear energy continues to grow, the future demand for uranium is also expected to rise, potentially supporting the price of uranium inventories.

Recently, Canadian uranium producer Cameco announced that its joint venture Inkai in Kazakhstan had to shut down unexpectedly due to the expiration of government authorization, further catalyzing the rise in uranium prices.

Australia, with about 25% of the world's uranium reserves, is the country with the largest proven uranium reserves. Since the beginning of 2025, up to January 7, some uranium stocks on the ASX have seen gains, with $Aurora Energy Metals Ltd (1AE.AU)$ rising over 37%, $Global Uranium and Enrichment Ltd (GUE.AU)$ over 23%, $Silex Systems Ltd (SLX.AU)$ over 22%, $Aura Energy Ltd (AEE.AU)$ up 20%, and $Deep Yellow Ltd (DYL.AU)$ over 19%.

Main Players in Australia's Uranium Mining Industry:

$Paladin Energy Ltd (PDN.AU)$ is the largest uranium mining company listed on the Australian Securities Exchange and the fifth-largest globally by market value. Paladin Energy has made a $1.25 billion acquisition offer to Fission Uranium Corp, aiming to create a global uranium industry leader with assets in Canada, Namibia, and Australia. The combined group is expected to be valued at 5.27 billion Australian dollars and will be dual-listed in Australia and Canada. This acquisition will make Paladin one of the world's largest pure uranium companies, with an estimated 544 million pounds of uranium oxide and 157 million pounds of ore reserves. This will help Paladin secure a more significant position in the global uranium market, further enhancing its competitiveness and influence.

$Boss Energy Ltd (BOE.AU)$ is a company focused on uranium exploration and development. The capacity enhancement of BOE's Honeymoon uranium project in South Australia is proceeding as planned, with significant progress made in 2024. The project is on track to achieve a production target of 850,000 pounds of uranium oxide in the fiscal year 2025. In this quarter, BOE signed a market-linked agreement with a U.S. power company, securing its third binding Honeymoon concentrate sales contract. Previously, in July, it sold 200,000 pounds of uranium oxide to a European nuclear power station under existing sales contracts, earning $23.4 million in cash. By 2033, the total locked-in sales are expected to be around 3.5 million pounds, providing financial certainty for BOE.

$Deep Yellow Ltd (DYL.AU)$ has established a diversified portfolio of projects, including uranium exploration, early-stage, and advanced-stage projects, spread across various regions such as Omahola and Tumas in Namibia, Mulga Rock in Western Australia, and Alligator in the Northern Territory. The Mulga Rock project is expected to have an annual production capacity of 1,350 tons of uranium. The progress of this project will provide the company with a new source of uranium production, further enhancing its competitiveness in the uranium market.

$BHP Group Ltd (BHP.AU)$'s Olympic Dam mine in Australia is the world's largest single uranium resource site, with over one million tons of uranium resources. Although copper is the main resource mined at the site, the asset also has reserves of uranium, gold, and silver. In the fiscal year ending June 30, 2024, BHP produced approximately 3.6 million tons of uranium, an increase of about 2 million tons from the previous year. BHP currently accounts for about 7% of the global uranium production, making it one of the world's significant uranium producers.

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