While most commodities have been battered amidst the Coronavirus pandemic, uranium is heating up, and is experiencing a price spike on the back of tightening supply.
According to an article by Bloomberg, the radioactive metal used in nuclear fuel has climbed 31% this year, making it the world’s best-performing major commodity.
These gains have been spurred by mine shutdowns that have removed more than a third of annual global output at a time when demand from existing nuclear power plants has remained relatively stable.
The uranium industry has been depressed since the 2011 Fukushima disaster in Japan, which led to a global rethink of nuclear power worldwide, halting many new build plans in their tracks. This shift away from nuclear energy (on the back of increased interest in renewable energy) resultantly affected the price of the yellow metal, sending prices plummeting by as much as 75%.
I recall a long period of time where little news emerged from this once booming industry except for the divestment of uranium assets, now deemed as non-core, while other mining companies curtailed production, mine expansions and exploration.
Fast-forward to end-2019 and the re-emergence of the sector, in Africa, anyway.
Dual-listed uranium developer Bannerman Resources reignited test work (as part of an updated definitive feasibility study) at its Etango project in Namibia as it looks to develop the Etango project.
Moreover, ASX-listed explorer Lotus Resources has defined near mine and Brownfield exploration targets at the Kayelekera uranium project in Malawi, which it acquired from Paladin Energy in early March 2020, while ASX-listed Marenica Energy is expanding its land package in Namibia and also adding to its uranium portfolio.
TSXV-listed uranium junior GoviEx Uranium remained steadfast in its development of its Madaoela uranium project in Niger despite uranium’s fall from favour. Company CEO Daniel Major’s unwavering commitment to the asset, which the company acquired back in 2007, is most evident in his strategic use of time during the uranium downturn to re-evaluate and improve Madaouela’s project economics – preparation that will make it fund-raising and construction-ready as soon as prices shift, he says.
For more news on uranium’s rise, keep an eye out for my article in the upcoming June edition of Mining Review Africa, which will unpack the current state of the uranium market in more detail.