Tariff wars appear to be underway, and that could swing the door open for opportunities in uranium-focused ETFs. Of particular importance is the tariff tiff between the U.S. and Canada.
Global Push in Jeopardy?
The trade dynamic between the two countries could pose issues for critical minerals, including uranium. The global push toward green energy, in particular, could be at jeopardy, according to the Center Strategic & International Studies.
“As the United States races to reduce its reliance on China for minerals vital for national, economic, and energy security, tariffs with Canada may drastically undermine these efforts,” the CSIS noted. “Canada is the biggest source of the United States mineral imports, providing key sources of uranium, aluminum, nickel, steel copper, and niobium.”
Vital Mineral for Nuclear Power
President Trump appears to support policy that will shore up uranium as a vital mineral for nuclear power. As the linked Oil Price article alludes to, future policy by the Trump administration could translate to federal subsidies that support uranium mining projects.
In the meantime, however, the U.S. will still need to rely on other uranium-producing countries. One of those, as mentioned, is Canada.
“Collaboration between the United States and Canada will be crucial for establishing a resilient, secure, and expanded uranium supply chain,” the CSIS said further. “Currently, uranium supply is heavily dominated by Russia and China, which together control over 50 percent of the world’s uranium enrichment capacity. This concentration poses significant risks to U.S. energy stability and national security.”
US Needs Canada as Willing Trade Partner
Even as the U.S. tries to tap into its own uranium supply, it will need the assistance of Canada as a willing trade partner. The country’s uranium reserves vastly outnumber that of the U.S.
“Although the United States should work to increase its domestic uranium production capacity, Canada’s reserves are significantly larger—about 10 times bigger,” added the CSIS.
2 Uranium ETFs Worth Consideration
If uranium prices jump on tariffs, consider a pair of options from Sprott. Notably, look at the Sprott Junior Uranium Miners ETF (URNJ ) or the Sprott Uranium Miners ETF (URNM ).
Small-cap companies can offer amplified moves when markets trend toward the upside. For investors who don’t mind the added risk of small-cap equities, URNJ is ideal. The fund seeks to provide investment results that correspond generally to the total return performance of the Nasdaq Sprott Junior Uranium Miners Index. That index tracks mid-, small-, and micro-cap companies in the metal’s mining business.
Risk-Averse Option
More risk-averse investors who want simple, diversified uranium mining exposure can opt for URNM. The fund tracks the North Shore Global Uranium Mining Index. It invests in global firms that mine, develop, and produce the metal. It also invests in firms that hold the physical metal, or royalties from it.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.
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Past performance is no guarantee of future results. One cannot invest directly in an index. Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.
Sprott Asset Management USA, Inc. is the Investment Adviser to the ETFs. ALPS Distributors, Inc. is the Distributor for the ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management LP or VettaFi.
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URNJ, COPP, COPJ, NIKL, SGDM and SGDJ
