Special Edition Uranium (Part II): The Hidden | Australian Markets

Today, we’ll choose up from Monday’s version and proceed our three-part particular sequence on the Uranium market.

As detailed earlier within the week, France has entry to plentiful, dependable, low-carbon vitality because of its unwavering dedication to nuclear over the past a number of a long time.

The nation has constructed an vitality fortress whereas most of its European neighbours stay hostage to exterior provide, like Russian gasoline.

Not solely that, however France’s entry to low-cost baseload energy additionally means it’s in a prime place to soak up profitable knowledge centre initiatives.

Major backers like Microsoft and Amazon are pouring billions into developing energy-hungry knowledge centres all through France.

As I discussed earlier within the week, Charles de Gaulle helped lead the nation within the battle in opposition to Nazism. Now, his nuclear legacy helps to determine France’s AI future!

No matter what innovation brings, ENERGY will stay the limiting element.

And France has established a large aggressive benefit because of its means to generate low-cost, base-load energy.

In an period when the West faces declining productiveness, ageing populations, unsustainable vitality prices, and sticky inflation, nuclear actually is the financial prescription!

But there’s a catch….

France has one crucial kink in its in any other case impenetrable ENERGY FORTRESS.

One that would have important implications for commodity traders.

So, let me clarify.

Lights out over Paris

This is the place we contact on the darkish facet of France’s heavy pivot to nuclear energy.

As I identified earlier, France shouldn’t be endowed with mineral wealth.

According to the World Bank, the nation imported about 12 million kilograms of natural uranium in 2023.

To put that in perspective… Total world manufacturing that yr was about 60 million kilograms.

That means France alone absorbed about 20% of the complete world provide!

But what would occur if more nations recognised France’s aggressive benefit and pivoted to nuclear? As traders, we should always take into account this.

Yes, demand would ultimately drive more output at uranium mines. But nothing strikes rapidly within the mining sector.

New mines take years, typically a long time, to realize approvals, financing and all of the remainder!

But that is an exceptionally deep drawback for uranium, on condition that its provide chains have profound geopolitical dangers.

Exposing France’s fragile provide

France was as soon as a world empire, utilizing its mighty fleet of naval vessels to secure worldwide provide chains of key commodities like gold, sugar, tobacco, and rubber.

While France ‘officially’ surrendered its colonial breadbaskets years in the past, highly effective connections stay… What some may label as ‘hidden colonialism.’

France has maintained an lively presence in its former colonies, particularly mineral-rich West Africa.

Don’t be fooled! This shouldn’t be about sustaining peace and democracy just like the mainstream would have you ever imagine.

It’s about securing uncooked supplies.

Over the years, France has deployed 1000’s of troops throughout uranium-rich Niger.

This landlocked West African nation holds some of the world’s largest uranium reserves and presents France round one-third of its necessities.

And for years, the French, aided by native elites, have bled this uranium-rich nation dry.

Despite feeding France with an abundance of uranium and powering it towards financial dominance, Niger stays one of the poorest international locations on Earth.

Famine, drought, warfare and poverty stay the each day plight of most people right here. But instances are altering for the French and the West more broadly…

The West is Losing Its Grip on Established Supply Chains for Raw Materials

Across France’s former colonies, important management adjustments are happening. New Junta governments are changing former pro-Western dictators.

And these new leaders are inclined to despise Western governments and their worldwide mining corporations!

Gold miners throughout Mali are waking up to this new actuality.

And in 2023, a coup d’état broke out in uranium-rich Niger, ousting the nation’s President.

Mohamed Bazoum was a cozy ally for the West, a key cause France had entry to a low-cost, dependable uranium provide.

But as I’ve outlined, that scenario is trying precarious…

In 2024, the new Junta authorities cut navy ties with the US, ordering 1,000 American troops out of the nation.

And since coming to energy, it has cosied up to new allies in China and Russia, nations that are additionally eager to grab maintain of Niger’s huge uranium reserves.

Clearly, France is dropping its grip on Niger and West Africa more broadly.

The area has grown drained of feeding the West with plentiful sources, receiving little in return. And that represents a important menace to France’s ENERGY FORTRESS!

For the second, Niger continues to export uranium to France. But how long that lasts is anybody’s guess!

Approximately a third of France’s uranium provide comes from the Sahel…

A dispute that creates a sudden provide disruption will devastate France’s vitality security.

In my thoughts, governments, traders and the West are usually not listening to this probably main menace.

But this isn’t a drawback remoted to France:

This has a a lot broader implication for any nation trying to faucet into the miracles of nuclear vitality.

I’ll conclude this three-part particular sequence on uranium subsequent week, detailing further dangers to provide and alternatives to focus on during the uranium sell-off.

Regards,

James Cooper,
Editor, Mining: Phase One and Diggers and Drillers