Friday, August 13, 2010

Enriching Investment Portfolios With Nuclear Green

The recent oil spill in the Gulf of Mexico has reopened the global debate on our continued dependence on fossil fuels as prime sources for world energy requirements. As witnessed from the horrific aftermath of the deepwater horizon oil spill, its clearly in the interest of human race to continue developing alternative, non-carbon-emitting fuels and technologies that can save the human as well as the animal race from grave dangers associated with our reliance on oil and coal. As the world searches for answers to the rising energy demands, nuclear energy as sustainable, economically feasible, environment friendly option is coming up as a favorite choice. Seeing the ever-increasing global energy demands, the only real alternate available option is nuclear energy, which makes a case for exploring investment options in Uranium. Because of its yellowish color, this naturally occurring metal ore is colloquially referred to as “yellowcake.” Uranium is also the key fuel for nuclear power plants. The uranium investment market is expected to be more regulated in coming years with the growth in the sector and more private participation. The power produced by uranium is seen as the only option for reducing world pollution while meeting the needs of a burgeoning world population. Uranium investing presents good prospects because more and more nuclear plants are being constructed to address a variety of energy needs.

  • Uranium in its enriched form is the fuel of nuclear power stations – 440 of them generate 16% of the world’s electricity.
  • One kilogram of uranium-235 can theoretically produce about as much electricity as 1500 tons of coal.
  • According to the World Nuclear Association (WNA), Uranium which is crucial for the generation of nuclear power, was used in 436 nuclear reactors in 32 countries around the world as of Feb. 1, 2010.
  • Massive oil finds is a thing of the past and people need alternative energy sources, with the benefit that even environmentalists are starting to acknowledge that nuclear may be viable part of a greener future.
  • Other energy resources suffer from disadvantages that make atomic power an increasingly attractive alternative. Oil is getting too expensive and scarce while Coal is too dirty producing nearly 10% of the world’s greenhouse gases and and most alternate energy sources are not yet commercially viable.
  • World leaders have pledged to more than double the current nuclear energy output within the next 20 years.

Uranium Investment Options

Uranium over the years has emerged as an excellent investment option. The price of uranium shot up from about $10 per pound in 2003 to more than $130/lb in 2007, according to the Financial Times. Canada, Australia and Kazakhstan represent 71% of global mine supply of uranium. The uranium market was relatively closed for investors till 2007, when the New York Mercantile Exchange launched uranium future contracts for private investors. Australian and Canadian uranium stocks are the most preferred stocks and among the most favored investment opportunity in uranium. Most of the uranium mining companies are listed on the Canadian and the Australian stock exchanges.

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