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Uranium Rally Signals New Generation of Nuclear Energy Acceptance

Uranium had been sitting at historic lows for most of the last decade, but as demand and sentiment surrounding uranium turned around slowly, prices have…

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This article was originally published by Mining Feed
Ranger Uranium mine in the Northern Territory, Australia.

Uranium had been sitting at historic lows for most of the last decade, but as demand and sentiment surrounding uranium turned around slowly, prices have begun to turn around. Prices have risen by 40% in the month of September alone, overtaking all other major commodities. A few weeks ago, millions of pounds of supplies were scooped up by the Sprott Physical Uranium Trust. That deal alone was enough to push prices significantly higher in a single day and put the uranium story on the map of every miner, trader, and refiner.

Uranium has gotten somewhat of a bad reputation after a series of disasters at multiple reactors. The visuals of those accidents were enough to turn people off from the idea of having a reactor near their town or home. However, the price changes happening now show that buyers are ready and the industry might be set for a resurgence.

Barriers for Uranium Not Insignificant

It’s a massive bet on the importance of nuclear power in a carbon-free future. The problem, at least for investors who have pumped hundreds of millions and in some cases billions of dollars into this bet, is that a debate is raging over whether nuclear power should return to the forefront. Nuclear energy has been taboo since the Fukushima disaster in Japan, and the 2011 meltdown and recent accidents show that reactors are too dangerous for some people to stomach. And because nuclear power is carbon-free, it has attracted opposition from progressives and environmentalists who have concerns about radioactive waste. 

According to Chris Gadomski, a leading nuclear analyst at Bloomberg NEF, only 50 reactors are under construction, a 20-year low. Still, in his view, there is nothing overdone about the uranium rally. 

Producer stocks were in a frenzy that now seems to have peaked. Cameco Corp. fell more than 13% after hitting a 10-year high last week. Exploding uranium prices now seem to have hit the brakes. Futures trading in New York fell as much as 9.8% on Tuesday before ending losses and closing the day at $49.75 a pound, 0.3% lower than that. 

Kazatomprom, the world’s largest uranium producer, warned that recent price moves have fueled financial investors in utilities that use the radioactive metal as fuel for their reactors. There is also speculation about a new Sprott Physical Uranium Trust and what it might do next after its aggressive move several weeks ago.

Nuclear power has always been controversial, but the debate has never been more polarized. Uranium skeptics tend to agree that nuclear power will account for a larger share of electricity generation if global governments implement their ambitious plans to wean themselves off fossil fuels. Supporters anticipate a nuclear fission renaissance that could mobilize $5.9 trillion in global investment by 2050 — the year dozens of nations, including the US — aim for net-zero economies. 

A Viable Option

Worldwide, awareness is growing that the closure of coal and natural gas-fired power plants is leading to blackouts. Dependence on wind, solar and hydropower is proving cumbersome, as evidenced by the constant threat of blackouts in California and rising energy prices in Europe. This is where the promise of nuclear power, with its round-the-clock carbon-free electricity, comes in. 

To unlock this potential, Sprott Fund has been buying uranium daily. The pace of its purchases has changed and is now a regular occurrence on the open market, contributing to price swings. The surge in demand comes at a time of historically low prices as pandemic mine disruptions prompted uranium producers, including Cameco, to buy more in the market to fulfill their long-term contracts with consumers. That helped push uranium futures up to $50.80 last week, the highest level since 2012. 

In fact, Sprott’s purchase has eliminated inventories that have been hanging on the market since Fukushima and led to the shutdown of most of Japan’s nuclear reactors. Disasters such as Fukushima and accidents such as Chernobyl and Three Mile Island have made nuclear power look suspicious for years. 

From East to West

But some governments are rethinking that approach. Illinois Governor J.B. Pritzker signed a sweeping climate change bill this month that subsidises Exelon Corp with $700 million over five years, prompting the company to change course and keep two nuclear power plants in the state alive. According to the China Nuclear Energy Association, the short-term objective in China is to approve six to eight new reactors a year by 2025, with 70 gigawatts in operation and 40 more under construction.

And in Japan, nuclear power is slowly returning. So far, Japan has restarted one-third of its 33 operational reactors under Fukushima safety regulations, with the remainder to be restarted by 2030. Taro Kono, the minister of administrative reform who has emerged as a leading candidate to succeed Prime Minister Yoshihide Suga, has said that nuclear power will be necessary to some extent if the country is to meet its pollution-reduction targets. 

That is not to say that this will not be an uphill battle. Some nations are turning to nuclear power again, while others are phasing out nuclear power. Germany, for example, will shut down its last reactor this year. 

Better, Safer Tech, and a Quiet Uranium Revolution

At the same time, the future of nuclear power is fueled by a new generation of smaller reactors that are expected to be faster and cheaper. They will need less uranium than the huge conventional plants currently in operation and have the potential to dampen the commodity market. But it will take at least a decade to get them up and running. In the meantime, the big question is whether investors’ gains in demand will be enough to support the market. 

All the right pieces are in place for the next part of the cycle. It is possible that the recovery in the spot market could be a catalyst to encourage more utilities to get involved and sign long-term contracts. That would not only change the future of the uranium market and industry, but the energy industry around the world.

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

The post Uranium Rally Could be Sign of New Era of Nuclear Acceptance appeared first on MiningFeeds.

Author: Matthew Evanoff

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Energy & Critical Metals

The Ethical Investor: ESG moves, lessons from the energy crisis and JP Equities’ stock tips

The Ethical Investor is Stockhead’s weekly look at ESG moves on the ASX. This week’s special guest is JP Equity … Read More
The post The Ethical…

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The Ethical Investor is Stockhead’s weekly look at ESG moves on the ASX. This week’s special guest is JP Equity Partners’ director and partner, Nic Brownbill.

The world is in the grip of an ongoing global power crisis that has seen energy prices soaring by thousands of percentage points.

From China to Europe and now India, the cost of energy is surging drastically. The price of natural gas has even quadrupled in some parts of the world.

 

Source: IEA via Reuters

 

But economists are now warning this might be just the first of many power crunches the world will see as we transition into the new economy.

According to a research paper by CommBank’s analyst Vivek Dhar, there are two main root causes that led to the crisis — a strong demand recovery from the pandemic, and an acute shortage of two key power-producing fuels – natural gas and thermal coal.

As economies reopen, there is a sudden pent up demand from consumers which meant that factories were forced to switch on their production capacity at short notice. This was exacerbated by a colder than usual European autumn, as the continent potentially faces a more-freezing-than-usual winter season.

In China, the crisis mainly stemmed from an undersupply in local production of coals, according to Dhar, adding that coal supply has been hampered in China because of the government’s own environmental protection regulations.

So what can we learn from all this?

Dhar reckons that we are transitioning into the new economy too fast, too soon.

“What the recent energy crisis has shown is that the energy transition needs to be planned carefully,” Dhar wrote.

“This will mean significant investment in renewable generation, batteries, electricity grids and hydrogen.”

But he thinks the roll-out of a decarbonised grid and role of gas need to be clearly defined too.

“Under-investing in gas infrastructure relative to its role in coming years will only serve to make Europe’s energy market more vulnerable to prolonged gas shortages, and increase dependence on Russia.”

Like Europe, China’s decarbonisation ambition will need to be planned as well, Dhar said.

“If coal mines and coal power plants are closed before a renewable replacement is in place, power shortages in China could be an ongoing concern.”
 

What’s happening in Australia

Australians have chosen climate change as the top ESG priority, according to the latest survey conducted by global ESG consultant, SEC Newgate.

And more than half of the 1,000 Aussies surveyed said they were happy with the direction the government is taking on the environment.

ESG Rio
Source: Survey by SEC Newgate

 

Aussie respondents also nominated retailers Coles Group (ASX:COL) and Woolworths (ASX:WOW) as the top local companies when it came to doing well on ESG metrics.

These results should provide food for thought for PM Scott Morrison, who’s currently caught in a political wrangle with the Nationals in setting our 2050 climate goals.

The PM has told Liberal colleagues that he wants to bring a binding 2050 net zero commitment to the COP26 Summit in Glasgow next month, without having to upgrade Australia’s 2030 commitments.

Nationals Leader and also Deputy PM, Barnaby Joyce, said however that he was willing to back the 2050 targets only if funding for regional producers and farmers were made as part of the deal.
 

Special guest JP Equities’ Nic Brownbill shares his views and ESG stocks

Nic Brownbill, a partner at JP Equity, told Stockhead that decarbonisation is a mega global investment opportunity, one that JP Equity wants to be all in on.

How big is the potential for ESG investing?

“We see the whole decarbonisation theme as the next mega global investment opportunity. An estimated $41 trillion is required to decarbonise the planet. It’s going to be a bigger opportunity than the crypto market, because unlike cryptos, the carbon market is going to be mandated by governments, major asset managers and pension funds.”

Which segment of the ESG market do you see outperforming?

“Some companies will fall short in trying to make their carbon targets, so the balance will need to be met with carbon credits. I think carbon emissions will eventually be metricated, and the carbon offset market is going to be a way for major companies to offset their emissions.”

Would that investment opportunity catch on in Australia?

“I believe the Australian market hasn’t really caught on to the opportunity of this yet. But I think something will really start to emerge from the COP26 conference in November, where you’ll see a sustained mega theme starting to unfold in this country.

“I think we will start to see a complete emergence of Australian companies in the carbon space over the next few months and beyond.”

What are the ASX stocks that JP Equity likes in the carbon credit space?

One ASX stock that we’ve been watching very closely is  Fertoz (ASX:FTZ). They’re a leading North American fertiliser manufacturer that produces a unique low-emission rock phosphate product that increases crop yield by 15%.

“Importantly, it can generate significantly lower CO2 emissions in manufacturing compared with other commercial fertilisers.

“This presents a really significant opportunity because agriculture as a sector accounts for 24% of all human generated greenhouse emissions. Fertoz is one of the first movers in the carbon credit market, and since May this year has been issuing carbon offset credit certificates.

“It’s not a matter of if, but when disclosure of carbon emissions will become metricated. And as a result, Fertoz is getting some strong enquiries from other companies looking to offset their footprints by buying carbon credits.”

Any other ASX stocks you like in the ESG space?

“We’re also bullish on Mpower (ASX:MPR). The company is Australia’s leading specialist in renewable energy, battery storage and micro-grid business. It has a focus on five megawatt solar farms, and is in the process of creating an initial portfolio of 20 sites across Australia in the coming years.

“That gives them an aggregate capacity of around 100 megawatts, and an estimated value of more than $150 million. It’s now down to what the team can deliver in some of those projects to build up the portfolio.”

 

Notable ASX ESG-related news during the week

Rio Tinto (ASX:RIO)

The energy giant announced that it was targeting a 50% reduction in Scope 1 and 2 emissions by 2030, and a 15% reduction by 2025 from a 2018 baseline of 32.6Mt.

Around $7.5 billion in direct capital expenditure will be spent on decarbonising Rio Tinto’s assets from 2022 to 2030, including $0.5 billion per year from 2022 to 2024.

Strandline Resources (ASX:STA)

The company released its Sustainability Report for 2021, outlining its commitment to the United Nations Sustainable Development Goals (UNSDGs).

STA said it’s focused on managing development risks at its Coburn project in WA to safeguard workers and ensure environmental compliance.

Lithium Power (ASX:LPI)

The company has appointed global consulting firm Deloitte to ensure a robust ESG program at its Maricunga project in Chile.

Deloitte has been tasked to imbed sustainable protocols in LPI’s lithium extraction operations, and to establish ambitious standards for LPI to become a carbon neutral producer, while keeping high standards on the social aspects.

Jadar Resources (ASX:JDR)

The company also said it has completed its maiden Sustainability Plan, with strategies aligned to the UNSDGs.

 

The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead.

Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.

The post The Ethical Investor: ESG moves, lessons from the energy crisis and JP Equities’ stock tips appeared first on Stockhead.




Author: Eddy Sunarto

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Energy & Critical Metals

You Can Now Buy A Flying Car That Looks Like A Star Wars Spacecraft

You Can Now Buy A Flying Car That Looks Like A Star Wars Spacecraft

Forget Elon Musk’s Tesla Cyberquad ATV because there’s a new form of transportation…

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You Can Now Buy A Flying Car That Looks Like A Star Wars Spacecraft

Forget Elon Musk’s Tesla Cyberquad ATV because there’s a new form of transportation for the offroad enthusiast now available, and it looks like something out of Star Wars. 

Sweden’s Jetson Aero has begun manufacturing a personal electric vertical take-off and landing (eVTOL) aircraft that will zip around the skies at 63 mph. 

The Jetson One eVTOL is an octocopter with four arms that produce 88 kW (118 horsepower) at full throttle. The pilot sits in an aluminum/carbon fiber frame and controls the craft via a throttle lever on the left, a joystick on the right, and a pair of pedals, likely controlling yaw.

According to vehicle car website Autoevolution, “the company [Jetson Aero] said that you can easily climb as high as 1,500 meters (4,921 feet) with Jetson One.” So far, videos only show the eVTOL moving at high rates of speed at low altitudes.  

Someone who weighs roughly 187 pounds can expect 15-20 minutes of flight time before the batteries need a recharge. 

New Atlas noted the eVTOL comes 50% built, and presumably, owners will have to assemble the rest. For that reason, the craft will likely fly under “experimental” where pilots don’t need a license to fly. 

As for price, a $22k deposit will give someone the right to reserve a build slot for 2023. There are only three left. Production in 2022, a total of 12, has already been secured from people worldwide, including a few in California. 

Personal eVTOLs appear to be the next big trend in transportation that will revolutionize how people (rich people) travel and commute or spend their leisure time. 

Tyler Durden
Sat, 10/23/2021 – 23:00

Author: Tyler Durden

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Energy & Critical Metals

LG Companies to Pay $918M Over Chevy Bolt Fires, Resume Plans for IPO Before Year-End

LG Chem has come to an agreement with General Motors (NYSE: GM) to cover the cost of the Bolt battery
The post LG Companies to Pay $918M Over Chevy Bolt…

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LG Chem has come to an agreement with General Motors (NYSE: GM) to cover the cost of the Bolt battery recall, as the automaker is forced to recall all Bolt EVs ever produced.

According to a company statement seen by Bloomberg, LG Energy Solution and LG Electronics Inc— both of which are owned by LG Chem Ltd and manufactured electric vehicle batteries for GM, have agreed to pay the automaker a combined 1.1 trillion won, or $918 million in costs related to the Chevy Bolt recall.

LG Energy is expected to pay about 620 billion won after fires started in about a dozen Bolts, prompting GM to issue a recall spanning across more than 100,000 vehicles. LG Electronics, which was responsible for packaging the cells produced by LG Energy into modules that were placed in the batteries, has also agreed to compensate GM 480 billion won in costs.

Including previous costs related to the recall that were disclosed during the companies’ second-quarter earnings, both companies are now responsible for coming up with a total of 1.4 trillion won related to the recall. Following the news, LG Electronics slumped by nearly 1% before paring back losses, while LG Chem jumped by over 4%.

On Tuesday, LG Energy also announced that it will resume plans to launch an IPO before the end of the year, after putting the original plans on hold after GM announced the recall. LG Energy was one of the largest EV battery manufacturers in the world between January and August, and according to a report cited by the Korea Times, the company’s valuation sits at around 100 trillion won, or $83.58 billion, with expectations that it could raise nearly 10 trillion won during during the IPO.


Information for this briefing was found via Bloomberg and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post LG Companies to Pay $918M Over Chevy Bolt Fires, Resume Plans for IPO Before Year-End appeared first on the deep dive.


Author: Hermina Paull

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