The first commercial nuclear power station began operation in the 1950s. Now, nuclear power plants are operational in 30 countries worldwide. In fact, through regional transmission grids, many more countries depend in part on nuclear-generated power. Italy and Denmark, for example, get almost 10 percent of their electricity from imported nuclear power. Almost 450 nuclear power reactors generate about 11 percent of the world’s electricity. About 60 more reactors are under construction, equivalent to 16 percent of existing capacity, while an additional 150-160 are planned, equivalent to nearly half of the existing capacity. In 2016, nuclear plants supplied 2477 terawatt hours (TWh, which is equivalent to one billion kilowatt hour) of electricity, up from 2441 TWh in 2015. This is the fourth consecutive year that global nuclear generation has risen, with output 130 TWh higher than in 2012.

Sixteen countries depend on nuclear power for at least one-quarter of their electricity. France gets around three-quarters of its electricity from nuclear energy; Hungary, Slovakia, and Ukraine get more than half from nuclear; Belgium, the Czech Republic, Finland, Sweden, Switzerland, and Slovenia get one-third or more. South Korea and Bulgaria normally get more than 30 percent of their electricity from nuclear, while in the United States, United Kingdom, Spain, Romania, and Russia about one-fifth of electricity is nuclear. Japan is accustomed to relying on nuclear power for more than one-quarter of its electricity, and is expected to return to somewhere near that level soon.

One would expect, then, that investment in uranium should be a lucrative endeavor. But the truth is, investing in uranium is almost forgotten. Uranium lost almost 75 percent of its price when comparing prices today to prices in 2011. Thus, supplies are slashed while the demand is steadily growing. Therefore, uranium prices have the potential to skyrocket in future.

In the meantime, global electricity consumption is growing at around 2.5 percent a year, and this growth is expected to continue for decades. Hydroelectric power is already widely exploited, and there is a finite number of suitable rivers that can be dammed. Both solar and wind power have huge growth potential, but at least for now, they also have limitations. This leaves nuclear power as the only carbon-free power source that’s easily scalable to meet growing overall electricity demand, and that make up for falling production from fossil fuels like coal. Most of the growth in electricity demand comes from emerging markets. In China, less than 4 percent of electricity comes from nuclear power. In India, it’s less than 3 percent. These percentages are expected to grow substantially in future.

China alone has 38 operational reactors and 20 more under construction, with many more planned in future. India has 22 operational reactors, is currently building six, and has a further 19 planned. In fact, there’s a long list of countries currently building nuclear reactors, from Argentina to Pakistan to the United States. The ongoing growth of nuclear power means increasing demand for nuclear fuel, which, of course, is uranium. But, there are two sides to every commodity coin. Price moves are determined by both demand and supply.

Uranium is commonly found in nature and mined by companies. Prices jumped from less than $10 per pound in the early 2000s to over $135 per pound in 2007, during the commodity price boom. That was clearly a speculative bubble, after which the price collapsed to $40 per pound in 2009. It then shot back up to around $75 until the disaster in Japan, before steadily falling to today’s level around $20 per pound. The commonly accepted cost of production is $60 per pound.

Initially, this means the price must triple for the industry to reach breakeven. This will happen at some point, and the price may go much higher. Yet, the uranium market remained in huge oversupply for many years. That was partly a hangover from excessive investment in new mines during the bubble years, but also due to supply from decommissioned nuclear weapons.

The result was that supplies have been substantially reduced. For example, Kazakhstan used to make up over 40 percent of global production. But, Kazatomprom — the state-owned mining company — has reduced production significantly due to low prices. It cut production by the equivalent of 3 percent of the global total in January 2017 and a further 8 percent in January 2018.

Canada is another example. Canadian miner Cameco Corporation, by far the largest privately-owned miner, suspended around half of its production for 10 months, starting in October 2017. This measure removed another 12 percent or so of global production. Despite this, the stock price actually rose on the news, since it meant losing less money now while the company waits for better prices.

Uranium, an oft-forgotten commodity, is shaping up to be a very attractive investment.