Commodities, Finance, News, Uranium

Why did uranium stocks jump this week?

uranium stocks

ASX-listed uranium stocks spiked this week after the US Government revealed as $US4.3 billion ($6 billion) plan that aims to increase the country’s reliance on domestically-produced enriched uranium.

According to Bloomberg, US Energy Department officials have met with key congressional staff to advance the plan, which would see the country wean off its uranium imports from Russia. The US has yet to sanction Russia despite the nation’s instigation of the conflict in Ukraine.

While Russia is not a major uranium miner, it is a prominent downstream player, with the US particularly reliant on its low-enriched uranium to power its nuclear reactors.

According a report from Columbia University’s Center on Global Energy Policy, Russia owned 40 per cent of the world’s uranium conversion infrastructure in 2020 and 46 per cent of the world’s uranium enrichment capacity in 2018.

The US, on the other hand, has one active domestic uranium enrichment plant on which to rely, located in New Mexico, suggesting the domestic market remains largely unproven.

After the report was revealed, some ASX-listed uranium stocks rose more than 10 per cent. Boss Energy jumped from $2.19 at close on Tuesday to a high of $2.54 on Wednesday.

Vimy Resources increased to $0.23 – its highest share price since early May – while Paladin Energy soared more than 15 per cent to a high of $0.81 on Wednesday.

Both Boss and Vimy are looking to bring Australian uranium projects online in the coming years, with the former’s Honeymoon operation in South Australia the more advanced of the two.

Boss recently made a final investment decision (FID) to restart its Honeymoon project, which has been on care and maintenance since 2013. The company forecasted that following the FID, it would be able to commence production within 12–18 months.

Vimy is developing its Mulga Rock uranium project in Western Australia, which is advancing towards a bankable feasibility study the company hopes to complete in 2023.

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