Yellowcake Rising in 2H 2025
Uranium’s Rise in the
Clean-Energy Revolution
Uranium, commonly referred to as “yellowcake” due to its bright yellow color, is experiencing a renaissance of sorts as countries around the world seek reliable, carbon-emission-free power sources to meet climate initiatives while shoring up energy security.
As the essential fuel for clean-burning nuclear reactors, uranium, also known as U3O8, has regained its prominence as the only source of baseload, carbon-emission-free electricity generation available today.
Countries worldwide are increasingly recognizing the strategic value of nuclear energy as fossil fuels are slowly phased out of the energy equation.
With mounting demand for clean energy, and with geopolitical factors reshaping the global nuclear landscape, the positive supply-demand fundamentals for uranium are setting the stage for a resurgent bull market that could begin materializing as soon as 2H 2025.
Yellowcake’s Role in the Clean Energy Future
The world is quickly realizing that lofty climate goals will be impossible to meet without clean-burning, carbon-emission-free nuclear energy being an integral part of the clean-energy mix.
During a prolonged period of depressed uranium prices through the 1990s up until late 2021, many of the world’s largest producers curtailed operations and/or placed mines on care and maintenance.
The end result: a significant uranium supply deficit that’s unlikely to be resolved anytime soon despite a concerted effort to ramp up global production.
With uranium, what we arrive at today is a market that’s consuming close to 200 million pounds of yellowcake annually — yet producing only around 140 to 150 million pounds.
That equates to a 50 to 60 million pound structural deficit this year, which, when compounded over the next five years to the end of the current decade, balloons to a jaw-dropping 300 million pounds.
That’s a staggeringly large deficit… and it underpins the escalating need for new uranium sources from safe mining jurisdictions reaching the supply chain.
And it’s really only the start.
The International Atomic Energy Agency (IAEA) projects that global nuclear power capacity could double by 2050, significantly boosting uranium consumption and, hence, demand.
Concurrently, the World Nuclear Association (WNA) reports that demand for uranium is expected to grow steadily through 2030, fueled by increasing nuclear reactor construction across Asia, Europe, and the Middle East.
Japan, which had scaled back its nuclear ambitions post-Fukushima, is currently in the process of reactivating reactors while simultaneously considering new builds as part of its clean energy strategy.
China recently approved the construction of six new nuclear reactors across three provinces with plans to build up to 150 new reactors over the next 15 years as part of their newly-enhanced decarbonization mandate.
South Korea and India have also joined the fray and are now fully onboard with a clean energy future that will require vast amounts of uranium.
France, a long-time proponent of nuclear energy, has announced plans to build at least six new reactors by 2050. President Emmanuel Macron states,
“Nuclear power is essential for our energy sovereignty and climate goals.”
Even Finland’s Green Party — following decades of staunch opposition — has now voted in favor of categorizing nuclear power as a form of sustainable energy. At present, one-third of Finland’s electricity is derived from nuclear power. And in 2023, the country’s OL3 reactor, Europe’s largest, finally went online.
Other European nations are quickly falling in line with Finland’s pro-nuclear stance.
Britain and Sweden are each planning new nuclear reactor projects with Belgium and Spain also cementing their support for the clean energy source.
At last year’s COP29 conference in Baku, Azerbaijan, 31 nations including some of the largest economies in the world, signed a declaration to triple nuclear capacity by 2050.
Here in the United States, TerraPower is currently constructing a $4B nuclear power plant in Wyoming that’ll use an all-new blend of enriched uranium.
Once completed, it is expected to generate efficient, low-cost, clean energy while utilizing enhanced safety standards that greatly reduce the risk of accident — even on par with wind power plants.
NuScale recently became the first company to be granted approval by the US government on small modular reactor (SMR) design with the US Nuclear Regulatory Commission giving it the green light.
Privately-owned Standard Power followed up that news with an announced partnership with NuScale on the construction of two SMRs to power its data center customers.
The Advent of SMRs & Why It Matters
The development of small modular reactors (SMRs) has become a gamechanger for the nuclear industry.
These reactors offer a more flexible, cost-effective, and scalable solution compared to traditional large reactors.
John Kotek, Vice President of Policy Development at the Nuclear Energy Institute, says,
“SMRs are the future of nuclear energy. They require less uranium per reactor but open up new markets, ultimately driving overall demand higher.”
Countries including the United States, Canada, and UK are investing heavily in SMR technology. Bill Gates-backed TerraPower and Rolls-Royce SMR are among the leading companies advancing this technology.
AI Data Centers: A New Frontier for Uranium Demand
The rise of Artificial Intelligence (AI) is contributing to uranium’s demand surge as tech companies continue to invest heavily in building and powering massive AI data centers through SMRs and traditional reactors.
These data centers require a stable and scalable power supply to handle the vast computational needs of AI systems, such as machine learning algorithms and large language models.
Nuclear energy is emerging as a preferred choice for these data centers due to its ability to provide baseload, non-interrupted, carbon-emmission-free electricity.
In the United States, major tech players including Microsoft, Google, and OpenAI have announced plans to develop AI-focused data hubs that prioritize clean energy sources, including nuclear power.
Microsoft has signed a 20-year Power Purchase Agreement (at U3O8 prices well above current spot) with Constellation Energy to restart Three Mile Island. Constellation expects to spend $1.6 billion refurbishing the reactor with a projected restart by 2028 pending regulatory approval.
The landmark deal marks the first time Microsoft has secured a dedicated, 100%-nuclear-powered facility for its data center use. And it’s likely just the very beginning with Microsoft announcing plans to spend upward of $80 billion on their AI data centers in 2025 alone.
Amazon Web Services (AWS), a subsidiary of Amazon, also recently announced the purchase of a nuclear-powered, 960-megawatt data center campus from Texas-based nuclear plant operator Talen Energy for $650 million.
Internationally, nations such as Japan and South Korea are also advancing nuclear projects to support AI-driven technologies.
Thomas Johnson, CEO of NuclearTech Solutions, states,
“The rapid expansion of AI and cloud computing is creating an unprecedented demand for reliable, emissions-free power. Nuclear energy, with its unparalleled efficiency and stability, is uniquely positioned to meet this demand while supporting the global clean energy agenda.”
The trend underscores a growing acknowledgment of nuclear energy’s expanding role in a tech-driven future, further solidifying uranium’s importance in the global energy landscape.
Favorable Uranium Supply-Demand Fundamentals
Put plainly, increased uranium demand is coming from all angles as we kick off 2025. That includes a new contracting cycle that’s just now getting underway with major utilities entering the market to secure their next long-term U3O8 contracts.
Sprott CEO John Ciampaglia, states,
“If you take out the Chinese contracts that were signed this year, which were quite large, the amount of uranium purchased by the rest of the world looks quite low, and that's why I think we remain very constructive and bullish.”
The combination of dwindling secondary supplies, supply cuts from the highest-margin producers, and utilities coming back into the market will create what many experts agree will be a resurgent uranium bull market that could last for several years.
Adding further upward impetus, the Inflation Reduction Act of 2022 provides additional funding for US nuclear projects, including a tax credit for electricity produced at qualified nuclear power facilities.
Next, you have to look at the precariousness of the global uranium supply to really get the full picture.
Kazakhstan — a former Soviet republic and the world’s largest uranium producer via state-owned Kazatomprom — produces roughly 40% of global supply with the bulk of that production going primarily to Russia and China.
Kazatomprom, which is controlled by the Kazakhstan government, has lowered its uranium production guidance for full-year 2025 by 5000 tU (tonnes U3O8), citing uncertainties in sulphuric acid supply.
The Kazakhs also announced a surprise hike in extraction taxes (from 6% to 9%) in their home country.
On top of that, the MET (Mineral Extraction Tax) for uranium will further increase starting in 2026 when a two-tier system goes online, which will take into account production output and spot uranium prices. Producers with large uranium assets in Kazakhstan could potentially end up paying an MET as high as 20%.
BMO Capital says the new tax system will limit future supply growth, which, of course, means an even tighter supply of uranium at a time of escalating global demand.
Industry leader Cameco Corp. (NYSE: CCJ), which owns 40% of the giant Inkai uranium mine in Kazakhstan, had this to say:
“As 40% of the world's uranium supply, any disruption in Kazakhstan could of course be a significant catalyst in the uranium market. If nothing else, it's a reminder for utilities that an over-reliance on any one source of supply is risky. It also reinforces the shift in risk from suppliers to utilities that has occurred in this market.”
And that’s happening now.
On 1 January 2025, Joint Venture Inkai LLP (JV Inkai), a partnership between Kazatomprom (60% ownership) and Cameco (40% ownership), suspended uranium production due to not receiving an expected extension for submitting updated Project Documentation to Kazakhstan’s Ministry of Energy.
The suspension of production at the Inkai Mine could have a significant impact on uranium supply as it is one of the largest uranium producers globally.
Turning to Russia, last year, the United States enacted the Prohibiting Uranium Imports Act, which effectively bans imports into the United States of unirradiated, low-enriched uranium and natural uranium produced in the Russian Federation or by a Russian entity.
The global uranium supply is being further constrained by a recent military coup in Niger, the world’s seventh-largest producer representing over 4% of supply.
It’s that level of widespread geopolitical chaos that’s leading to increased energy insecurity around the world as supply comes under increasing pressure, particularly in the global uranium market.
Uranium supply is also under siege as companies look to capitalize on the opportunity to purchase large amounts of drummed uranium in the open spot market with the Sprott Physical Uranium Trust (SPUT) acquiring some 66M lbs over the last few years — and with others like Yellowcake PLC and Uranium Energy Corp. following suit.
As a result, uranium inventories are continuing to shrink, most notably from 3.5 years to around 2 years of supply in the United States, well below the historical average.
We also talked about restarts and lifespan extensions on reactors… and it’s not just Japan that’s headed down that road.
In California, steps are underway to potentially extend the life of the Diablo Canyon Reactor for an additional 5 years from 2025 to 2030.
The same exact thing is happening in countries such as Belgium, Finland, and Slovakia.
All of that is to say that any further disruptions to the global uranium supply chain could lead to a run on uranium prices — possibly similar to what we saw back in 2006-07 when uranium soared to $140 per pound on the flooding of Cameco’s Cigar Lake Mine and, as well, what we witnessed in 2023-24 as uranium prices spiked to $100-plus per pound.
Both of those upsurges caused the share prices of most uranium mining companies to breakout, resulting in substantial gains for well-timed investors.
At present, uranium is trading right around $65 per pound. A few short years ago, uranium prices were languishing at the $30/lb level. In other words, the market is experiencing what we would characterize as a temporary pullback in an otherwise longer-term upward trend.
With geopolitical upheaval at an all-time high in key uranium producing countries, the writing’s clearly on the wall for higher uranium prices going forward.
It also underpins the need for increased uranium production from safe jurisdictions such as the United States, Canada, and Australia.
Why You Should Be Investing in Uranium Now
The global uranium sector stands at a pivotal moment, driven by an evolving clean energy landscape, technological advancements, and geopolitical factors.
As demand for nuclear energy intensifies, and as supply constraints persist, the longer-term outlook for uranium prices remains decidedly bullish.
Industry leaders and analysts agree that uranium will play a critical role in meeting the world's clean energy needs, making for a compelling investment opportunity for the foreseeable future.
John Smith, Chief Investment Officer at GreenRock Capital, states,
“We see a tremendous opportunity in the uranium space. The fundamentals are strong, and we expect substantial returns as the market tightens and prices rise.”
Cameco CEO Tim Gitzel adds,
“We are entering a period where demand will outstrip supply for the foreseeable future. This is a clear signal for higher uranium prices and increased investment in new mining projects. The fundamentals for uranium are the strongest I’ve seen in my career. With supply constraints and soaring demand, it’s not unrealistic to see prices surpassing $80 or even $100 per pound in the near future.”
With a consensus bullish market outlook within a temporary market consolidation, contrarian investors are turning their attention to uranium mining and exploration companies with district-scale operations in safe, tier-one mining jurisdictions.
Let’s take a look at some of those now.
Uranium Large Caps Offer A Lower Risk Factor
Generally speaking, uranium-focused large-caps offer investors an opportunity to invest in the space with less risk than their smaller-cap counterparts. In essence, we’re talking about established uranium companies with a history of withstanding multiple market cycles.
A couple of solid examples are Cameco and Energy Fuels.
Cameco Corp. (NYSE: CCJ) is one of the world's largest uranium producers and the largest in North America.
The company owns a major stake in the Cigar Lake Mine, the world's most productive uranium mine, as well as the McArthur River Mine and Key Lake Mill (below) in Saskatchewan’s prolific Athabasca Basin.
The company’s shares are currently trading slightly above their 52-week low, which can be seen as an advantageous entry point for contrarian investors with a long-term investment approach.
Cameco also offers diversification via its significant investments across the nuclear fuel cycle, including ownership interests in Westinghouse Electric and Global Laser Enrichment. And as noted, Cameco owns 40% of the Inkai Uranium Mine in Kazakhstan.
Energy Fuels Inc. (NYSE-Amer: UUUU) is the largest uranium mining company in the United States, producing around two-thirds of all uranium mined in the US since 2017.
Similar to Cameco, the company’s shares are currently trading slightly above their 52-week low.
Energy Fuels owns and operates several conventional and in-situ recovery uranium projects in the western United States, including the White Mesa Mill in Utah, the only fully-licensed and operating conventional uranium processing facility on American soil.
The company also provides diversified exposure to other critical elements and minerals such as REEs (Rare Earth Elements), HMS (Heavy Mineral Sands), vanadium, and medical isotopes.
Simplicity of Uranium Sector ETFs
For investors seeking broad exposure to the uranium industry without having to select specific stocks — a uranium-focused ETF may be the perfect fit.
In what we anticipate will be a resurgent uranium bull market in the coming quarters and years, we like the Global X Uranium ETF (URA), the Sprott Uranium Miners Fund (URNM), and the VanEck Vectors Uranium+Nuclear Energy ETF (NLR).
All three funds are currently trading near their respective 52-week lows, signaling a potential advantageous contrarian buy-window for foresighted investors.
Junior Uranium Miners:
Higher Risk / Higher Potential Reward
For those with a slightly higher risk tolerance, the small-cap “junior” uranium exploration sector — which happens to be our bread and butter — could see the most investor attention in the near to mid-term as the need for new uranium production from safe mining jurisdictions continues to intensify.
For direct access to the top uranium juniors, be sure to check out our own Gerardo Del Real’s Junior Resource Monthly newsletter where he delves deep into the small-cap space (across the full metals spectrum) with specific recommendations and timely buy-sell alerts.
As you’ll soon discover, Gerardo is laser-focused on uranium juniors with district-scale exploration projects in politically stable regions such as the United States (Wyoming, New Mexico, Colorado), Canada’s Athabasca Basin, and Australia’s Northern Territory.
In closing, it is still very early-innings in what’s shaping up to be a resurgent uranium bull market, which means right now is an opportune time for resource investors to consider positioning for what could be a material move higher for uranium prices and related uranium mining equities in the latter half of 2025 and beyond.
Importantly, during a sector-wide consolidation such as what we are witnessing at present, we recommend establishing positions incrementally with a focus on buying the dips.
Again, check out Junior Resource Monthly for more on the proper approach.
— Daily Profit Cycle Research