The price of uranium recently hit fresh highs, surpassing $100/lb for the first time in years. This positive development, which prompted Denison Mines (DNN) to restart the McClean Lake mine in Canada, could just be the beginning of a long trend.
As demand for nuclear fuel keeps growing, analysts are scrambling to set price predictions, speculating whether it can surpass 2007 highs.
“Even though the price is broken out to $100, there’s a lot of opportunity here because you need to basically double production globally between now and 2040,” said John Ciampaglia, CEO of Sprott Asset Management, which runs the $6.5 billion Sprott Physical Uranium Trust (OTC:SRUUF).
In an interview with Crux Investor, he forecasted a surge to $160/lb this year from the current $106/lb, stating, ‘It’s going to have to stay elevated for a very long period of time because of the long lead times and the large capex that’s required to basically get these projects built.’
Also Read: Uranium Revival: Denison Mines Resumes Operations At McClean Lake As Prices Soar
The uranium market is facing a potential squeeze owing to both supply and demand. In recent years, China took the lead in nuclear power construction, bringing the number of nuclear plants under construction up to 22. Additionally, 22 other nations just pledged to triple their nuclear electricity production by 2050, further driving the demand for uranium.
Yet, main suppliers are struggling to meet these demands, and deficits to achieve these nuclear energy goals could be anywhere between 1.5 million and 2.3 billion pounds.
Kazakhstan’s Kazatomprom (OTC:NATKY), the world’s largest uranium producer, recently warned that sulphuric acid shortages and construction delays would impact its production over the next two years. Similarly, Cameco Corp (NYSE:CCJ), Canada’s leading producer, stated that the current uranium price is insufficient to support most greenfield mining projects.
Escalating de-globalization with multiple ongoing armed conflicts further adds to supply challenges, as the potential U.S. ban on Russian uranium imports could create further issues by 2028.
Meanwhile, Niger, another significant uranium producer, is undergoing a mining sector overhaul. This African country is suspending new mining licenses as a part of an audit to boost…
Click Here to Read the Full Original Article at Cryptocurrencies Feed…
