When the world is searching for answers to the rising demand of energy, nuclear energy is coming up as a favorite choice. According to the Environmentalists for Nuclear Energy, wind farms, PV solar panels, tidal energy and other conventional renewable energy sources are inefficient and impractical to meet the rising demands of energy.
Nuclear energy may be an answer to everything - it is sustainable, economically feasible, environment friendly and the waste can be easily managed – recent developments in the nuclear waste management technologies have made it a lot easier. Analyzing the current global energy scenario, the demand for nuclear power and uranium are poised to rise.
Growth of Nuclear Energy and Uranium Demand
There are more than 400 nuclear reactors worldwide. The major investments in nuclear reactors are not only from developed countries, but developing countries are also dreaming of a nuclear powered future. Many nuclear projects are currently going on in India, China, Japan, Italy, Germany and US. China alone is adding 30 nuclear reactors in 2010. India, Japan and Russia are shooting for 22, 11 and 42 nuclear reactors in near future.
Uranium Investment Opportunities in Canada and Australia
Uranium is emerging as an excellent investment option. The price of uranium shot up from about $10 per pound in 2003 to more than $130/lb in 2007, according to the Financial Times. Canada, Australia and Kazakhstan represent 71% of global mine supply of uranium. The uranium market was relatively closed for investors till 2007, when the New York Mercantile Exchange launched uranium future contracts for private investors.
Australian and Canadian uranium stocks are the most preferred stocks and among the most favored investment opportunity in uranium. A way of investing in uranium is through investing in the uranium exploration companies' uranium mining stocks. Kalahari minerals and BHP Billiton are some of the many uranium mining companies listed on the Australian Securities Exchange and/or the Toronto Stock Exchange. BHP Billiton is the world's largest mining company. Most of the uranium mining companies are listed on the Canadian and the Australian stock exchanges.
Another way to enter into uranium investment market is through exchange traded funds traded on the New York Stock Exchange, such as the Market Vectors Nuclear Energy fund. Uranium Participation Fund and Uranium Investment Corporation, traded at Toronto Stock Exchange are some additional options available in uranium investment.
Risks and Threats in Uranium Investment
With the increased production of uranium, the prices of uranium shares have come down. The peak of the cycle of uranium prices has passed according to Edward Sterck, equity analyst at BMO Capital Markets. Other risks includes the supply risks of uranium from the relatively politically unstable uranium supplier countries such as Niger and Kazakhstan. Due to long term contracts of uranium suppliers with the power companies, there is a risk of locking for the mining companies in contract prices, even when the prices of uranium has risen in the world market.
Investment in Uranium is Still Not a Bad Option
“Security concerns over global oil supply and fears of global warming have shifted public opinion,” say analysts at Canada’s Haywood Securities, “with nuclear energy becoming an acceptable option again.” The threats of decease in demand are merely speculations. Seeing the ever-increasing energy demands when the only available option is nuclear energy, investment in uranium is not a bad option. The uncertainties including the political instability in uranium supplier countries are exaggerated. The uranium investment market is expected to be more regulated in coming years with the growth in the sector and more private participation.
References:
Environmentalists for Nuclear Energy, ecolo.org (accessed on May 14, 2010)
'Nuclear choice: Time to invest in uranium?' Luci Warwick-Ching, FT.com (accessed on May 14, 2010)
'Nuclear Power -- Uranium Stocks Set to Soar,' preciousmetalinvestment.com (accessed on May 14, 2010)
'This Precious Commodity is About to Go Vertical,' investmentu.com (accessed on May 14, 20100
Manoj Yadav - A working professional and a freelance writer by interest, I enjoy studying and writing about diverse issues and topics. Being a student ...
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