Special Report: Investing in the Future of Thorium

Take a look at the word thorium.

What do you see?

Those familiar with Norse mythology or the Marvel comic books might notice the root of the word is Thor, the name of the god of thunder. Thor is known for his strength and power, wielding a hammer and controlling the lightning and thunder.

The name alone implies a superhuman power, a superior energy. And the element doesn't disappoint...

Thorium is a radioactive chemical element that can be found in soil and rocks. In its purest form, it appears as a silver metal, but when heated in the air, it becomes a white light, much like lightning.

Thorium is currently used in things such as light bulbs and camera lenses. It can create a high-quality refractive glass, and its high melting point allows ceramics to resist high temperatures.

But light bulbs and ceramics aren’t what have the energy industry watching thorium so closely...

Nuclear power is.

You see, thorium’s ultra-high melting point can be useful in more than just ceramics. Heat resistance is something scientists and energy specialists alike have tried desperately to achieve with nuclear energy.

One of the biggest issues with nuclear plants is the meltdowns that can occur if the uranium is not cooled properly. We saw that tragically exhibited in Japan in 2011, when an earthquake and tsunami caused a series of meltdowns at the Fukushima Daiichi plant. The fact that the only other disaster of that caliber was the 1986 Chernobyl meltdown has done little to ease the minds of world governments and energy companies. This simply highlighted the tragedy that can come along with it.

Which is why thorium’s properties have become so valuable. If the material were virtually meltdown-proof, the clean energy possibilities would be endless.

There is only one problem: Thorium is unable to sustain a nuclear reaction on its own.

Thorium in Nuclear Energy

Thorium’s inability to sustain a nuclear chain reaction causes a problem, but it’s not one without a solution.

The material can actually prove quite effective when combined with a fissile material — one that is able to sustain a nuclear reaction.

These materials include uranium-233 (which is actually an isotope of thorium), enriched uranium (U-235), and plutonium (Pu-239).

The use of thorium in a nuclear reaction significantly lowers the waste produced; of the waste that does occur, radioactively decaying elements are lowered as well. Combined with weapons-grade uranium, for instance, one University of Oslo researcher found that thorium can aid in reducing radioactive waste by up to 95%.

And the safety of a thorium reactor compared to one using uranium is much higher. As mentioned before, thorium’s high melting point makes a nuclear meltdown much less likely.

But thorium can’t be used in just any nuclear reactor. Only seven types are safe for thorium reactions, including heavy water reactors, high-temperature gas-cooled reactors, boiling (light) water reactors, pressurized (light) water reactors, fast neutron reactors, molten salt reactors, and accelerator driven reactors. Molten salt reactors and accelerator driven reactors are still conceptual, though the other five have all been tested at some point.

The liquid-fluoride thorium reactor (LFTR), a type of molten salt reactor, is being touted by many as the best solution to thorium-powered nuclear energy. In these types of reactors, thorium and uranium fluorides are combined into a salt mixture that’s heated to a molten substance, which is then used to fuel the reactor.

These reactors have the potential to become self-sustainable, as they will be able to produce U-233 (the thorium isotope).

Flibe Energy, a company started by nuclear technologist and former NASA aerospace engineer Kirk Sorensen, is conducting research on LFTR technology with a view to eventually incorporate these reactors, not just into electrical energy generation, but also into fields as vastly different as desalination, cancer treatment, and deep space exploration.

Creating the Nuclear Reaction

Still, the fissile material that enables a thorium reaction is actually fairly difficult to supply...

For years, the U.S. has had a steady stream of U-235 coming in, but that ran out in 2013.

Following the fall of the Soviet Union in 1991 and the Lisbon Protocol in 1992, the U.S. and Russia arrived at the U.S.-Russian Highly Enriched Uranium Agreement, or what came to be known as the “Megatons to Megawatts Program.”

Under the terms of the 1993 agreement, Russia would dismantle Soviet nuclear warheads and convert 500 tonnes of highly-enriched uranium to low-enriched uranium, which would be sold to the U.S. for use in nuclear reactors.

At the end of 2013, ten years after the start of the program, all 500 tonnes had been converted. As a result, the U.S.’s steady supply of uranium came to a halt.

This affects not just thorium reactors, but currently operational nuclear reactors using uranium as well.

It’s bad news for the U.S. supply, though the U.S. has found new sources of supply to draw from now. We can only hope the supply lines keep up...

If not, expect the price of uranium to jump.

But for thorium, it might not be as bad as it seems. After all, U-235 isn’t the only fissile material that could be combined with thorium for a nuclear reaction...

U-233, an isotope of thorium, can react with thorium for a nuclear reaction. And this is the focus of the LFTRs, as it could lead to self-sufficiency of these reactors with the recycled waste.

It’s not easy. Thermal breeding, as the process is called, requires the reactor to produce more fissile material than it consumes, and it requires a highly specialized type of reactor.

Regular nuclear reactors are unable to breed to the point where it is unnecessary to add more of the fissile material. But many LFTRs are being designed as breeding reactors. While regularly adding thorium to these reactors would be necessary, adding U-233 would not. Enough fissile material would be created in the reactions to sustain it on its own.

Investing

Investing in thorium can be tough, as it’s not yet used for commercial nuclear power generation. Companies like Flibe Energy, which is focused on thorium reactors, are still private.

But there are several companies working on thorium solutions that you can add to your portfolio...

Lightbridge Corp. (NASDAQ: LTBR)

Lightbridge is working on thorium-based seed & blanket fuel assembly for new and existing reactors. This technology, which Lightbridge has developed to be compatible with light water reactors, uses “thorium-uranium oxide pelletized fuel rods similar to that of conventional fuel rods presently used in commercial light water reactors.”

The difference, the company explains, is that the thorium-uranium oxide will replace the more conventional uranium oxide.

The company is one of the few publicly traded companies working with thorium technology -- which is at its heart, is not a proven profit-driver. Investment in this company relies on a very long view and a belief in the technology. Luckily, over the last year, the stock price has slid into very valuable territory.

In the beginning of 2014, the company received a patent (#8,654,917) for its multi-lobed metallic fuel rod design and fuel assemblies. Intellectual property like this adds tangible value to companies dealing with future technologies, so long as they can get it tested and approved for use.

Plus, the market for the company's technology has grown over $25 billion since this patent was approved.

Uranium Mining Companies

Several uranium miners, like Cameco Corp. (NYSE: CCJ) and Unity Energy Corp. (TSX-V: UTY), are mining uranium in areas that also have concentrations of thorium.

Though neither company has reported on significant mining of thorium, both are well-positioned to profit should the demand for the metal skyrocket.

As thorium reactor testing continues in nations like Norway and India, and major investors like Bill Gates (whose company TerraPower has begun testing thorium reactors) get involved, attention to the metal will only grow...

Research on these reactors will lead to implementation, and that will lead to profits for the well-positioned investor.

Thorium is the nuclear fuel of the future. Keep a close eye on this one.