Ryan Stancil,
Editor
Jan. 14, 2022
Last week, the people of Kazakhstan took to the streets, and the effects were felt the world over.
The former Soviet satellite nation was rocked by protests that temporarily caused the government to lose control of the city of Almaty.
Control was only reestablished after Russian-led security forces used live fire that claimed dozens of lives.
Those Russian troops have begun to leave, the government has reasserted itself, and the situation is somewhat stable for now.
It started as a series of peaceful protests. The people were expressing their anger at rising fuel prices, but things quickly snowballed. Kazakhstan’s wealth comes from owning some of the biggest oil reserves in the world, but the common people rarely enjoy the fruits of that good fortune. Like so many other countries, the wealth is largely in the hands of a small percentage of the population. That was the issue at the core of much of the anger that eventually led to violence.
And while this all caused the country’s name to lead the news cycle for a few days, what came up less was the effect this had on energy markets.
That’s because oil reserves aren’t the only thing Kazakhstan has in abundance. It’s also one of the world’s main sources of uranium. It produces something like 40% of the world’s supply. Because uranium is so critical to plans many countries have for getting rid of fossil fuels, Kazakhstan is a critical partner.
The uprising showed just how critical.
When protests began growing violent, prices climbed because investors were afraid supply might become strained. They wanted to get what they could in case the unrest dragged on and uranium became harder to get.
Combine this with recent news out of Europe about ‘green’ nuclear energy, and it only makes sense that the price would climb.
Nothing came of the fears about uranium production being disrupted. Still, it put the element in front of people’s eyes for a few days and highlighted its importance. It also showed the danger that comes with being overly reliant on one supplier for something that just about everyone is going to need over the next few decades.
We’re currently in a uranium bull market that began last summer. As companies move away from fossil fuel and toward uranium, that’s only going to expand.
In the wake of the unrest in Kazakhstan, share prices of Kazatomprom, the country’s state-owned uranium supplier, saw a dip on those fears I mentioned.
But other companies saw an uptick in their prices. This was especially true for companies based in the US. Investors saw what was happening and put their money in the companies that would most likely benefit if Kazakhstan’s status as the world’s leading uranium producer was threatened.
This isn’t likely to be a one-time thing. Nuclear is quickly becoming a preferred clean energy source and tension with Russia is rising. The countries that need uranium will increasingly look away from Kazakhstan and to other countries that can supply what they need.
Because of that, there are companies in the US in particular that will benefit.
One small company is sitting on a deposit that could make it a household name during this uranium bull market.
It has the asset, the management, and the right conditions to become a leader in its industry. All it needs now is time.
That means you can get in now before it takes off.
When it does, you’ll be ahead of the crowd trying to play catch-up.
Keep your eyes open,
Ryan Stancil
Editor, Daily Profit Cycle