The uranium market is currently in the early-to-mid stages of a sustained bull cycle, distinct from the speculative bubbles of the past, such as the 2007 spike.

The current cycle is defined by fundamental physical scarcities rather than financial leverage. The nuclear fuel supply chain, hollowed out by over a decade of underinvestment following the Fukushima Daiichi accident in 2011, is now unable to respond rapidly to a demand shock that is both policy-driven and technology-driven.

Microsoft, Amazon, and Google signing nuclear PPAs goes to validate what the market hasn't priced in yet: AI's insatiable demand for 24/7 baseload power is colliding with a structural supply deficit that inventories can no longer mask.

The wall in frontier AI progress might just be energy, and after gas turbines, nuclear plants are the best in providing clean, price-competitive high capacity energy for decades.

(source: Sprott Uranium Report 2025)

In this week’s Impactfull Weekly, we dive into how uranium might just be the next underpriced commodity to rocket upwards in the next 2-3 years, looking into how the value chain of uranium works, and what are the growth drivers underpinning our thesis.

Uranium and the physics behind its value

The Physics & Economics of Energy Density

The primary economic advantage of nuclear energy stems from the immense energy density inherent in atomic bonds, which is orders of magnitude greater than the chemical energy released by burning fossil fuels. This physical reality dictates the economics of the entire industry.

A single standard uranium fuel pellet: a ceramic cylinder roughly the size of a gummy bear or a fingertip contains the energy equivalent of significant quantities of fossil fuels:



Fuel Source

Quantity

Energy Equivalent

Uranium Fuel Pellet

~10 grams (1 pellet)

~1 Ton of Coal

Coal

1 Ton

~2,000 kWh

Oil

149 Gallons

~5,800 kWh

Natural Gas

17,000 Cubic Feet

~1,500 kWh

This extreme density creates a "logistical moat." A nuclear power plant (NPP) requires refueling only once every 18 to 24 months. A strategic stockpile of nuclear fuel capable of powering a major economy for years can be stored in a modest warehouse. This further creates a “stored energy security” which in an era of geopolitical instability commands a significant premium over other conventional energy sources.

The economics of nuclear power generation are characterized by high upfront capital costs (CAPEX) and relatively low fuel operating costs (OPEX). The cost of uranium typically represents only 5-10% of the total Levelized Cost of Electricity (LCOE) for a nuclear plant. This cost structure renders nuclear utilities price inelastic.

What this means is, if the price of uranium triples from $50/lb to $150/lb for example, the impact on the final cost of electricity is negligible, amounting to fractions of a cent per kilowatt-hour. 

On the other hand, the cost of not having this fuel is catastrophic, and can incur heavy operational losses due to shutting down multibillion dollar reactors meaning when this supply chain is disrupted, uranium prices can rise exponentially. 

Four stages of the value chain

The first stage is the extraction of uranium ore from the earth’s crust. While uranium is relatively common (more abundant than gold or silver), materially important concentrations are rare. Production is highly concentrated in a few key regions: Kazakhstan, Canada, Australia, and Namibia.

(source: EIA.gov)

Stage 1: Mining

There are two primary extraction methods, each with distinct economic and technical profiles:

Dominant in Kazakhstan (via Kazatomprom) and utilized in the United States (Wyoming, Texas), In-Situ Recovery (ISR) involves injecting a lixiviant (oxygenated water mixed with either acid or alkali) into the ore body. The solution dissolves the uranium, and it is pumped to the surface for processing.

  • Advantages: Lower capital costs, no open pits or tailings, scalable production.
  • Risks: Technically complex hydrogeology. If the ore body is not permeable or if the chemistry is mismanaged, recovery rates plummet. Reliance on consumables like sulfuric acid (in Kazakhstan) creates supply chain vulnerabilities

Second comes conventional mining. Dominant in Canada’s Athabasca Basin and Africa, this involves underground or open pit mining to extract ore, which is then crushed and leached in a mill.

  • Athabasca basin: Canadian deposits are uniquely high-grade. Mines like Cigar Lake and McArthur River boast grades of 15-20% yellowcake (uranium ore concentrate), compared to the global average of 0.1-0.2%. This geological anomaly makes them the lowest-cost conventional mines in the world, though they are technically challenging to operate due to ground freezing requirements.

Stage 2: Conversion 

Once mined and milled, uranium ore concentrate ("yellowcake") is chemically stable but solid. To be enriched, it must be converted into a gas, Uranium Hexafluoride (UF6). This stage is currently the most severe chokepoint in the Western fuel cycle.

Following the Cold War, Western conversion capacity was allowed to atrophy as utilities relied on cheap Russian conversion services (major Russian player being Rosatom, controlling 40% of market share) and the drawdown of civilian inventories. Today, essentially only three Western facilities remain operational: Cameco in Canada, Orano in France and the recently restarted ConverDyn in the USA.

Conversion prices have surged to record highs, creating a bottleneck that prevents mined uranium from moving further downstream.

Stage 3: Enrichment

Crucially, the relationship between enrichment and mining is shifting from a source of supply to a massive driver of demand.

With Western utilities shunning Russian enrichment (historically ~44% of global capacity), the remaining Western facilities are severely bottlenecked. To maximise throughput and meet urgent contract deliveries, enrichers are forced to pivot from "underfeeding" (high efficiency) to "overfeeding" (high speed). 

This operational shift means Western techniques are now significantly more material-hungry: they are sacrificing efficiency for volume, requiring up to 35% more natural uranium feed just to produce the exact same amount of final fuel.

The transition from underfeeding to overfeeding is structurally equivalent to the disappearance of a major uranium mine. Analysts estimate this shift creates net new demand for 20-30 million pounds of U3O8 annually, a massive swing factor that the mining industry is ill-equipped to meet.

Stage 4: Fabrication & End of life

The final stage involves reconverting enriched UF6 back into uranium dioxide UO2 powder, pressing it into pellets, and loading them into zirconium alloy fuel rods. This stage is highly specialized to specific reactor designs (e.g., Westinghouse AP1000, Framatome EPR, Russian VVER). While less of a volume bottleneck, the bifurcation of the market creates technical challenges for nations operating Russian-designed reactors (e.g., Eastern Europe) who are transitioning to Western fuel fabricators.

With ~440 reactors and a 400 GW equivalent capacity, nuclear is generating 9% of world electricity and requires 175-180 million lbs of “yellowcake” U3O8 every year. The largest consumers of uranium globally are the US with 94 reactors, France with 56 reactors, and China with 58+ reactors. Lastly, in terms of spent fuel, the go to method remains dry cask storage in sealed containers that can last up to 1800 years. 

Pricing dynamics and a bull case for the yellow metal

Uranium pricing

Uranium does not trade on an open market like other commodities, instead buyers and sellers negotiate prices and contracts privately. However, there exist industry pricing benchmarks from UxC & TradeTech to help us draw the big picture of price evolution in uranium.

The commodity trades in two price tiers: 

  • Term contracts that account for over 91% of deliveries, these are multi-year deals with utilities that averaged $80-82/lb in 2024.
  • Spot market is more volatile, and accounts for only 9% of volume, financial players now making up 60-70% of this market (up from 5% in 2000).

(source: Cameco)

Term prices for uranium have constantly risen for the past 28 months, through early 2025, suggesting that utilities are securing this resource at any price, despite major demand from other sectors.

Studying global producer dynamics

Kazakhstan 

With 39% of global supply, the largest uranium producer, Kazatomprom has been running into production shortages as a critical ingredient for its ISR mining operations, sulfuric acid is now being diverted away into agricultural use. 

What’s more is that the grip Russia has on Kazakhstan will practically never loosen, thus worsening a vulnerability for Western nuclear customers. Despite efforts to build an alternative pipeline that goes through Azerbaijan, Georgia, and Turkey, the Russian influence will linger. 

Given the raw material crunch, and the complex geopolitical environment, Kazatomprom has cut production guidance for two years in a row, removing 5,000 tonnes of supply in 2025 alone.

North America 

With 25% of global supply, Canada & the USA have vastly different dynamics, however, despite the AI demand, the onshoring restart story of nuclear fuel and enrichment is slower than anticipated.

Canada (Cameco):

McArthur River: One of the world's highest-grade mine (6.55% grade) was restarted in Nov 2022 after a 4-year suspension

  • 2024 production was posted at 20.3 million lbs (record year)
  • In 2025 guidance was cut to to 14-15 million lbs due to ground freezing delays and ventilation repairs

Athabasca Basin, Cigar Lake: with an 17% average grade, it is an extraordinary asset for Canadian uranium

  • With an all-in sustaining cost of nearly $21/lb (industry-leading), and its utilisation was extended to 2036

United States (<1% but growing):

  • The Uranium Energy Corp restarted Christensen Ranch in Wyoming in Aug 2024, making it the first US production since 2018
  • In terms of nuclear fuels, the only operating conventional mill, White Mesa in Utah  produced 157,525 lbs by the end of Q4 2024
  • In August 2024, the USA also banned imports of Russian uranium, thus creating an additional $2.72 billion market allocated for domestic nuclear fuel chain
  • In addition, Trump’s executive order targeting 400 GW nuclear buildout by 2050 (vs 100 GW today) would require ~190 million lbs/year (4x of current US demand)

Africa 

With 16% of global supply split between Niger and Namibia, there are significant drawbacks affecting African uranium.

Niger (4-5%):

  • The July 2023 coup was transformative as the local junta seized Orano's SOMAÏR mine, leaving 1,050 tonnes of yellowcake stranded (~€300 million) due to border closures
  • In June 2025, a full nationalization was announced, and Orano has been trying to recuperate its resources with international arbitration

Namibia (12%):

  • Paladin's Langer Heinrich mine finally restarted, with commercial production beginning in March 2024 after 6 years offline
    • Dec 2024 marked their best month since the restart, producing 308,604 lbs of yellowcake
    • The 2025 target has been set at 4-4.5 million lbs with an all in cash cost ranging between $28-31/lb
  • Other operations like Rössing (CNNC), Husab (CGN) combined produce around ~5,600 tU every year

Australia 

With 8% of supply, Australia’s Olympic Dam has vast resources, but is also plagued by limited growth

  • BHP's Olympic Dam is the world's largest uranium orebody boasting of +1 million tonnes of resources
  • Here, Uranium is a byproduct of copper, representing 25% of mine revenue
  • FY2024 estimates posted a production of 3,603 tonnes of yellowcake, and even with the planned expansion of the mine, BHP says that uranium production increases "only ~1%" as copper drives all investment decisions

Two major growth drivers of this uranium cycle

The demand side of the uranium equation is being driven by two converging megatrends that reinforce one another: Energy Security and the AI/Data Center boom.

AI Data Centers

The most significant new development in the last 24 month period is the direct involvement of hyperscalers in nuclear procurement. 

AI models are energetically voracious, an AI query can consume 10 to 30 times the energy of a standard Google search. Data center power demand in the US is forecast to triple by 2030, driven by the build-out of training and inference clusters.

Renewables alone cannot service this load. Data centers importantly require "five nines" (99.999%) reliability and continuous baseload power. Wind and solar, being intermittent, require massive, expensive battery storage to meet this standard. 

Nuclear, with a capacity factor exceeding 90%, is the only carbon-free source capable of meeting this 24/7 requirement without fossil fuel backup.

Key Deals: 

  • Microsoft & Constellation Energy: In September 2024, Microsoft signed a 20-year Power Purchase Agreement (PPA) to restart the Three Mile Island Unit 1 reactor, renamed the Crane Clean Energy Center
  • Amazon (AWS) & Talen Energy: Amazon acquired a data center campus co-located with the Susquehanna nuclear plant for $650 million. The deal secures a direct line to 960 MW of nuclear power. By co-locating "behind the meter," Amazon bypasses transmission congestion and grid fees, directly accessing the reactor's output.
  • Google & Kairos Power: Google signed a master agreement to deploy 500 MW of SMR capacity by 2035, utilizing Kairos Power’s fluoride salt-cooled high-temperature reactor technology.

Nuclear renaissance & lifetime extensions

China: The undisputed leader in new builds, with 24 reactors under construction and plans to overtake the US in total nuclear capacity by 2030. China operates a strategic national stockpile program, aggressively locking up long-term uranium supply from Kazakhstan and Namibia to insulate itself from market volatility.

Japan: Slowly but steadily restarting its fleet. The "nuclear allergy" post-Fukushima is fading as energy security concerns exacerbated by high LNG prices, and a weak Yen take precedence. The government is pushing for reactor restarts and even considering new advanced reactors.

Europe: France is revitalising its nuclear sector with plans for new EPR reactors. Eastern European nations (Poland, Romania, Czech Republic) are aggressively pursuing both SMRs and large-scale conventional builds to decouple their power grids from Russian gas and coal. The UK released a landmark Nuclear Regulatory Review calling for a "radical reset" as the UK became the world's most expensive country to build nuclear due to fragmented oversight across 8 regulators.

India: Targeting 100 GW in nuclear by 2047 (from 8.9 GW today) with 18 reactors to be added by 2031-32, launching a $2.5B "Nuclear Energy Mission" for indigenous SMR development. The government amended the Atomic Energy Act to allow private sector participation for the first time, partnering with the US on reactor builds.

While China is building nuclear just because it can, other countries/regions are building nuclear because they must.

What could go wrong (and what to watch)

“Paper Reactor" & SMR delays

The most bullish demand projections rely heavily on Small Modular Reactors (SMRs) deploying at scale by 2030-2035. However, the SMR track record is yet unproven commercially.

  • NuScale Failure: The cancellation of NuScale’s flagship Carbon Free Power Project in Utah due to cost overruns (costs ballooned to $89/MWh) serves as a cautionary tale.

Risk: If SMRs fail to achieve cost competitiveness or face systemic regulatory delays, the demand curve post-2030 flattens significantly, leaving the market oversupplied if new mines come online.

Renewables & battery storage economics

Solar PV and wind costs continue to plummet. More importantly, battery storage technology is advancing rapidly.

Risk: If grid-scale battery storage becomes cheap enough (e.g., iron-air batteries being developed in China for multi-day storage), the "intermittency" argument against renewables weakens. A grid dominated by solar/wind + cheap batteries could undercut the economic calculations for expensive baseload nuclear power.   

Major nuclear accident

The nuclear industry operates under a unique risk profile where an accident anywhere is an accident everywhere. A meltdown or significant radiation leak, especially in China or Russia where transparency is lower, would trigger a global psychological and regulatory freeze similar to the post-Fukushima era that cost us a decade in nuclear rollout. This would destroy demand overnight and leave billions in capital on the table.

Macroeconomic Headwinds

While nuclear fuel itself is inelastic, the construction of new plants is highly sensitive to the cost of capital. Nuclear plants are multi-billion-dollar infrastructure projects.

Risk: A global recession or a "higher-for-longer" interest rate environment could cause utilities to delay capital-intensive new builds. If financing dries up, the "Nuclear Renaissance" could stall, pushing demand projections further into the future.



Companies to Watch

(our selection of top companies bound to benefit from the uranium renaissance)

Cameco (NYSE: CCJ) - Blue-chip uranium producer with reactor upside

Cameco is the liquid benchmark for uranium exposure, with Tier-1 mines, fuel services and a 49% stake in Westinghouse, a key beneficiary of renewed US and European nuclear build-outs. Recent results show lower volumes but higher realised prices and solid free cash flow, with net debt now modest. Management has lifted sales guidance, increased the dividend and is gradually shifting contracts toward market-linked pricing. Valuation is rich versus history, yet upside remains if volumes normalise and Westinghouse’s earnings power is fully recognised.

Sprott Physical Uranium Trust (TSX: U.UN) - Pure-play on uranium price

Sprott Physical Uranium Trust is the cleanest listed way to own spot uranium. The vehicle holds physical U3O8 in secure storage and issues units or ATM equity to fund incremental purchases when investor demand is strong, tightening the market at the margin. There is no operating or jurisdictional risk, only storage, fees and basis risk versus spot. For investors who want direct exposure to the uranium price rather than mine-specific execution, Sprott sits at the core of the theme.

Paladin Energy (ASX: PDN) - Restarted producer with operating leverage

Paladin offers geared exposure to higher prices via the restarted Langer Heinrich mine in Namibia, a brownfield operation with existing infrastructure and long reserve life. Management has signed a mix of fixed and market-linked contracts with utilities while preserving some unhedged volumes to capture upside. The balance sheet is clean after years of restructuring, and near-term free cash flow should step up as production stabilises. Paladin screens as a liquid, operationally leveraged way to express the uranium bull market.



Smaller companies to invest in

To dig further into smaller companies bound to benefit from the uranium renaissance, create your own StockScreener like we did:

Bonus: ETFScreener

To find out more about ETFs available to index the uranium renaissance, make your own ETF Screener like we did:




Our Take

The uranium market in 2025 sits at a unique point in history. 

The "inventory overhang" that suppressed prices for a decade has been fully consumed. The supply chain is now fractured by geopolitics, requiring a costly and time-consuming reconstruction of conversion and enrichment capacity in the West. Simultaneously, the demand signal is the strongest it has been in 50 years, amplified by the non-negotiable energy reliability needs of the AI revolution.

My opinion is that the supply deficit is structural and entrenched. It cannot be solved quickly. New mines take 10-15 years to permit and build. This implies a price environment that must rise to (and sustain) levels that incentivise new production.

The price floor for uranium is likely set by the marginal cost of production for Western brownfield restarts, roughly at around $75-$80/lb. Below this, the supply just shuts off.

The upside case in a nutshell is: resuming volume contracting by utilities, driven by the Russian ban enforcement in 2028 and the expiration of legacy contracts will likely drive term prices of yellowcake toward +$100/lb.

Winners of this cycle are companies with permitted, high-grade assets in stable jurisdictions (Canada, Australia, US) that will command a "security premium." The bifurcation of the market favors Western producers for now over their Eastern counterparts.

We will see continued direct buying by Microsoft, Amazon, and Google serving as a powerful accelerant. These entities have balance sheets that dwarf those of utilities and can pay any price for reliable power.

Investors in uranium are essentially betting on a race: Can the mining industry bring complex, capital-intensive projects online faster than the world's hunger for carbon-free baseload power grows? The data suggests the answer is "no," leaving the price of uranium as the only mechanism available to balance the market.

https://www.marketscreener.com/news/uranium-underpriced-commodity-for-a-nuclear-future-ce7d51dbd98ff027