Hillcrest Energy Technologies. (CSE: HEAT)
From concept to commercialization, Hillcrest is investing in the development of energy solutions that will power a more sustainable and electrified future.
Over the past two weeks, after the Russian government has imposed temporary restrictions on exports of enriched uranium to the U.S., the share prices of a number of uranium companies on the Toronto Stock Exchange and the New York Stock Exchange soared.
John Ciampaglia, chief executive officer of Sprott Asset Management, said uranium prices should recover to between $90 and $100 per pound by around June next year due to supply shortages and the impact of Trump’s America First policy on the nuclear fuel supply chain.
He noted that the United States, as well as other Western countries such as Canada, Australia and Namibia, are restarting or accelerating uranium oxide production. However, this is nowhere near enough to meet the 50 million pounds of uranium needed annually for U.S. nuclear power plants. Western countries are trying to limit uranium supplies from Russia, which controls about 40 per cent of the world’s uranium enrichment capacity.
Some Canadian uranium miners are highly confident and have accelerated production and forward contracts to supply U.S. energy companies in the wake of Russian restrictions on uranium supplies.
Canada, as the world’s second-largest producer of uranium after Russia, exports about 85 per cent of the country’s production and according to Canadian miners, the market is in severe deficit. Data reveals that a quarter of U.S. uranium is imported from Russia, and the rest is mainly imported from Canada and Kazakhstan, with very limited U.S. domestic uranium production.
However, president-elect Donald Trump threatened to impose a 25 per cent tariff on all goods from Canada and Mexico this week. Jason Barnard, CEO of uranium explorer Foremost Clean Energy, said that further upward pressure on uranium prices is inevitable, and that the US may not be ready to deal with the impact of higher prices.
Given the looming need for uranium in U.S. nuclear reactors, coupled with the fact that it must rely heavily on imports, Canada may be in a favourable position in any possible negotiations/discussions.
Cameco, one of the world’s largest publicly traded uranium miners, told Reuters it wants “unrestricted” uranium trade between Canada and the U.S., which desperately needs a secure supply of Western uranium fuel to meet growing electricity demand.
Though the cumulative risk of nuclear fuel supply is enormous, a coordinated Western response is needed to break the dependence on Russia and other state-owned companies to ensure a secure, industry-led, government-backed Western fuel supply.
The spot uranium price last traded at $77.10/lb.
