Amir Adnani: Uranium Supply Cannot Meet Demand
Tom welcomes Amir Adnani, CEO of Uranium Energy Corporation. Amir discusses how long-term contracts are responsible for 85% of uranium sale volume, and as a result, the spot market is relatively small. We haven’t seen a new contracting cycle since 2010, when prices went from forty to seventy dollars a pound. We are a decade into a historically long bear market and are beginning to see tighter supply, and producers are shutting in mines. The economics don’t work well at thirty-dollar uranium.
We are nearing the zone where the contract cycle should pick up. During the Trump administration, there was a three-year period of political uncertainty regarding possible quotas and tariffs. That kept buying and contracting at bay, pending the outcome. The supply-demand fundamentals are pointing to the need for higher uranium prices to bring on new supply.
Various companies are looking to buy and store uranium because the current price is below production costs. Having physical uranium in addition to cash can bolster the balance sheet. It also provides a strategic inventory that can accelerate cash flow instead of waiting for a mine to come online.
Uranium is a global market, and there are no substitutes. Most utilities aren’t overly concerned with price but are more concerned about available supply. Green energy and decarbonization put nuclear power in a strong position.
Amir outlines the difficulties in building a uranium mine. These mines take many years to come online, and permitting can be difficult. Few governments in the world fully understand all of the dynamics of the uranium space. Uranium requires patience and a very long-term perspective.
He discusses the picture for uranium mining in the United States and what it will take to make new projects economical. Today, nearly the entire supply chain is located overseas, and this is going to change. Uranium is a long-term opportunity.
The Biden administration has been pro-nuclear development, and both parties appear to recognize the need for nuclear energy. It’s essential to improve education around nuclear power and demonstrate it’s importance. There is a lot of fear and misconceptions around nuclear power that need to be overcome. On balance, there is a lot to be gained from nuclear power because it’s amongst the safest.
Time Stamp References:
0:00 – Introduction
0:33 – Mine Closures and Uranium
3:37 – Volume and New Contracts
5:53 – North America Supply
7:17 – Fuel Buying
11:39 – Utilities and Price
14:49 – Mine Development
20:08 – Nuclear Working Group
26:58 – Political Stability
30:32 – Sway Public Opinion
33:31 – Nuclear Safety
36:20 – Uranium Plays & Risk
38:40 – Understanding Uranium
40:57 – Wrap Up
Talking Points From This Episode
- Mine closures and utility contracting.
- Supply dynamics and cost of production.
- Mine development and nuclear safety.
- Education and green energy.
As the President and Chief Executive Officer, director, and a founder of Uranium Energy Corp (UEC: NYSE American), Amir Adnani advanced the Company from concept to U.S. production in its first five years and has developed an extensive pipeline of low-cost, near-term production projects.
Mr. Adnani is the founder and Chairman of GoldMining Inc. (GOLD: TSX; GLDG: NYSE American), a gold-resources acquisition and development company that has grown to control a sizeable portfolio of gold projects across the Americas. He is also the Chairman of Uranium Royalty Corp. (URC: TSX-V), a uranium royalty company. By background, he is an entrepreneur and earlier started and expanded two private companies.
Mr. Adnani is frequently invited to speak at prominent industry gatherings, including the Milken Institute Global Conference, the International Economic Forum of the Americas, the World Nuclear Fuel Market, and the International Atomic Energy Agency (IAEA). He is regularly interviewed by major business media outlets, including The Wall Street Journal, Bloomberg, CNBC, and Fox Business News.
Mr. Adnani is selected as one of “Mining’s Future Leaders” by Mining Journal, a UK-based global industry publication. Fortune magazine distinguished him on their 40 Under 40, ‘Ones to Watch’ list of North American executives. He was earlier a finalist for Ernst & Young’s ‘Entrepreneur of the Year’ distinction. Mr. Adnani holds a Bachelor of Science degree from the University of British Columbia and is a university’s Alumni Association director.