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Uranium Week: COP26 Puts Nuclear In Focus

Weekly Reports | Oct 26 2021

This story features BANNERMAN ENERGY LIMITED, and other companies. For more info SHARE ANALYSIS: BMN

While the weekly spot uranium price rallied 4% last week, the focus now turns to the COP26 Net Zero Summit.

-Nuclear in focus as countries prepare for the United Nations' COP26 Conference
-ASX-listed Bannerman Energy receives renewed environmental clearance 
-ASX-listed Deep Yellow intercepts significant mineralisation 
-Uranium spot price rises 4% for the week

By Mark Woodruff

Announcements from a number of global leaders leading into the Conference of the Parties to the United Nations Framework Convention on Climate Change or the COP26 Net Zero Summit have acknowledged the material role that nuclear will have in assisting global decarbonisation efforts.

While the nuclear industry won't have a formal presence in the Green Zone at COP26, global wealth manager Canaccord Genuity sees substantial upside risk to its in-house uranium demand forecasts.

Media reports in the UK suggest the government is poised to unveil funding for a proposal to develop 16 new small modular reactors (SMRs) in conjunction with Rolls-Royce. Canaccord Genuity feels Prime Minister Boris Johnson is keen to rebuild the nation’s nuclear energy commitment prior to COP26, particularly in light of the recent rise in power and gas prices.

Around 20% of the UK's electricity originates from nuclear, and half of the country’s reactors will potentially be retired by 2025.

Meanwhile in France, where 70% of electricity is generated by nuclear power, President Macron recently announced a US$1.16bn investment directed toward the development of new SMRs. According to the Energy Information Administration (EIA) in the US “One kilowatt of energy you produce in France is six times less carbon intensive than the equivalent in Germany.”

Speaking of Germany, a set of 25 leading public figures recently launched a campaign for the country to change course and reverse a plan to close all of its nuclear power stations. The group says Germany is in danger of missing its climate targets if the “2022 nuclear phase out plan” goes ahead.

Canaccord Genuity also notes Japan’s goal of reducing carbon emissions by -46% by 2030 assumes the restart of 30 nuclear reactors. These assumptions were outlined by Akira Amari, secretary-general of the Liberal Democratic Party. The party is also pushing for SMRs.

Company news

ASX-listed Bannerman Energy ((BMN)) last week received a renewal of Environmental Clearance for its proposed Etango uranium mine by the Namibian Ministry of Environment, Forestry and Tourism.

Managing Director and Chief Executive Officer Brandon Munro noted ongoing government support stems from high quality environmental and social assessments, broad community endorsement and a reputation for ESG leadership. 

Again in Namibia, ASX-listed uranium developer Deep Yellow ((DYL)) recently completed the first phase of drilling at its Barking Gecko discovery, where 13 of 14 holes drilled intercepted significant primary U3O8 mineralisation. The Barking Gecko prospect is part of the Nova joint venture.

Uranium pricing

TradeTech's Weekly Spot Price Indicator ended last week at US$47.75/lb, up US$1.75/lb from the prior week. Taking into account this 4% increase, the weekly spot price has increased 27% in the last two weeks. Tradetech reported “a number of utilities are in the process of evaluating their current portfolios and are actively assessing opportunities in an effort to insulate and hedge against further price increases”.

The Indicator is up 57% in 2021 and is 74% above the 2021 low point of US$27.40/lb. The average weekly spot price in 2021 is US$33.06/lb, US$3.35/lb above the 2020 average.

There were 2.7mlbs U3O8 traded last week, compared to 2.9mlbs in the prior week. According to TradeTech, investors and financial entities remain the primary buyers, although traders also participated last week and there is slow but steady buying interest from the end-user sector.

TradeTech's term price indicators are US$43.75/lb (mid) and US$45/lb (long).

No transactions were reported last week in the term uranium market.

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