The receptiveness of countries to nuclear energy will be imperative for growth in uranium-focused mining companies. Japan’s inclusion of uranium in its critical minerals list is a step in the right direction.
“Japan’s government has added uranium to its list of critical minerals, citing the threat to supply raised by Russia’s dominance of the mineral.,” confirmed Mining Magazine.
“The addition of uranium came alongside the designation of ‘advanced electronic components’’ to the list of ‘Specified Important Supplies’’ that aim to ensure a stable supply based on the Economic Security Promotion Act, reported Nikkei,” Mining Magazine added.
For the growth trajectory of uranium miners, Japan’s inclusion of the metal in its critical minerals list is a giant step forward. According to the Mining Magazine report, the country is looking to jump-start its nuclear energy program again by restarting reactors that have been dormant since the Fukushima crisis.
The report also mentioned Japan doesn’t have any uranium to mine locally, so it will need to rely on the resources of Australia, Canada, and Kazakhstan. This speaks to the ongoing supply crunch that uranium is facing as demand continues to ramp up. Of course, this only provides a catalyst for even higher uranium prices, which are already hitting record highs.
An Opportunity in Uranium Mining
After the United States and China, Japan is the third largest consumer of uranium. With demand set to rise over the coming years, this could also benefit miners.
That said, one exchange-traded fund worth considering for exposure is the Sprott Uranium Miners ETF (URNM ) that tracks the North Shore Global Uranium Mining Index. It invests in global firms that mine, develop, and produce the metal as well as firms that hold the physical metal or royalties from it.
For broader exposure to critical minerals, investors may want to opt for the Sprott Energy Transition Materials ETF (SETM ). The fund seeks to provide results that correspond to the total return performance of the Nasdaq Sprott Energy Transition Materials Index. That index essentially tracks the performance of a selection of global securities in the energy transition materials industry.
With the overall demand for these minerals projected to rise, the demand for miners that materially affect the global supply will also increase. To capture this growth potential, SETM provides investors access to miners producing key critical minerals like lithium for electric vehicles, for example. As of 12/31/23, about 23% of the fund is allocated to uranium equities for nuclear energy exposure.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.
