CHAMWE KAIRA
The uranium market showed further significant movement and positive dynamics over the quarter ending 31 December 2023.
Bannerman Energy Ltd, which was recently awarded a mining licence for its Etango Uranium Project in the Erongo Region said this week COP28 significantly changed the global perception of the nuclear energy sector.
The uranium spot price increased during the quarter from US$73 per pound to US$91 per pound subsequently passing through US$100 per pound in early January 2024.
The conference, which has been referred to as the ‘Nuclear COP’, saw over 20 countries, including the United States, France, Japan, and the UK, commit to tripling global nuclear energy capacity by 2050.
Bannerman said in a report that this marked shift in global energy policy underscores a growing acknowledgment of nuclear energy’s vital role in achieving climate goals and providing reliable baseload power alongside renewable sources.
“The focus on nuclear energy at COP28 has notably increased demand expectations for uranium.
The medium-term outlook for uranium demand continues to improve, driven by new construction and extensions of existing nuclear facilities.”
The company said supply responses to date, such as restarts and expansions planned for 2024/2025, may not fully match this rising demand.
Notable is the uncertainty around anticipated greenfield developments in Niger and a lack of new large-scale greenfield projects, suggesting a continued deficit in uranium supply.
The short-term supply of uranium is currently very tight, particularly following Kazatomprom’s January 2024 announcement that intended production expansions in 2024 and 2025 are in doubt, the company said.
Bannerman said most notably the Sprott Physical Uranium Trust has recently revised its shelf prospectus to enable an at-the-market raising capacity of US$1.5 billion and confirmed that its physical uranium holdings will not be redeemed or sold.
“The price appreciation is generally regarded within the industry as fundamentals driven – with only a minor role played by financial investors thus far and is therefore seen as unlikely to be short-lived. As a result of very strong sector fundamentals, including the above factors, most industry analysts and consultants anticipate conditions that support continued price growth in 2024,” the company said.
