Uranium has been one of the best-performing commodities in 2023. That upside should continue in the new year. That’s especially so taking into account the global race of nations shoring up their supply for increased nuclear power usage.
One ongoing theme for nations on board with using nuclear power has been the increasing development of strategic partnerships. Geopolitics are key regarding nations looking to tap into the resources of other nations’ abundant supply of the metal.
Driving Forces Behind the Rally
“Geopolitical uncertainty and concerns about the security of uranium supply continue to be the driving forces behind the ongoing uranium rally,” noted Jacob White, Sprott Asset Management ETF product manager, in a uranium report report referenced France’s cooperation agreement with Kazakhstan as a prime example.
“Notably, French President Emmanuel Macron’s November visit to Kazakhstan marked a pivotal event,” he added. “During this visit, a significant joint declaration was made to enhance trade and cooperation in the fields of nuclear energy and strategic minerals. Additionally, a crucial agreement was signed, focusing on collaboration in the nuclear fuel cycle.”
With the increased usage of nuclear power will be the rising demand for services such as the metal’s mining. According to a recent Wall Street Journal report, miners are already flooded with projects as the demand for the metal increases.
“Miners are struggling to get enough uranium out of the ground. That is helping to push prices of the nuclear fuel to nearly 16-year highs,” WSJ reported. The reporting added that one of the world’s biggest uranium suppliers, Cameco, “recently said it may need to buy more uranium before the end of this year to meet obligations to customers after suffering setbacks at key mines.”
This creates a unique investment opportunity to capitalize on the growth of the metal’s miners. As such, Sprott has a pair of ETFs that can offer this exposure.
2 Uranium Mining ETF Opportunities
For a large-cap focus with exposure to the biggest players in the metal’s mining space, consider the Sprott Uranium Miners ETF (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 those that hold the physical metal or royalties from it.
For even higher growth potential, investors can tap into small-cap opportunities via the Sprott Junior Uranium Miners ETF (URNJ ). The ETF seeks to provide investment results that, before fees and expenses, 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.
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