Nuclear power is back. Here’s how you can buy uranium

It seems strange to be talking positively about nuclear energy on the 40th anniversary of the Chernobyl disaster. But I think that’s part of the reason the nuclear investment opportunity exists today — terrible publicity over the decades. I also partially blame The Simpsons for imprinting the idea that nuclear power plants are owned by evil billionaires and staffed by fools. 

But global attitudes are shifting. Electricity demand will keep growing in every country in the world; populations need power. And if a country can’t generate its own energy, then the world can deliver some nasty surprises — the market is merciless.

Nuclear power offers large-scale, reliable baseload energy, produced domestically and, as a bonus, with very low lifecycle carbon emissions. Suddenly, that looks incredibly attractive.

Germany and Japan are rethinking their 2011 exit from nuclear. Switzerland, Denmark and Serbia are restarting stalled programmes while Poland and Vietnam are building their first reactors. Even countries like the UAE and Saudi Arabia are building nuclear capacity. Demand is going to keep growing, for construction, for operation. And for fuel.

Nuclear reactors run on uranium. Each reactor needs roughly 150 tonnes of raw uranium a year, every year. There are 440 nuclear reactors operating around the world (generating one tenth of global electricity supply). That’s around 66,000 tonnes needed. In 2024 the world produced about 60,000 tonnes, roughly the same as the past decade. With some clever recycling, the 10 per cent gap has been coverable.

However, each new reactor needs approximately 700 tonnes of raw uranium to get started for the first time, and then adds to total demand. In total there are more than 70 reactors being built across the world, with more than 100 in the planning stages. Within a decade, demand could be well north of 100,000 tonnes of uranium a year. Add in demand from aircraft carriers, submarines and data centres, and there’s a problem.

Supply can’t increase quickly: finding and developing a new source of uranium takes years, if not decades, and there are a limited number of companies that can do it. There aren’t many uranium miner start-ups.

For investors who think that the argument makes sense, there are two exchange traded funds (ETFs) — low-cost, passive investment funds listed on stock exchanges that track indices, sectors, or commodities — which offer slightly different kinds of exposure. 

The Global X Uranium ETF is quite tightly linked to the uranium itself, holding 50 or so miners and refiners. The biggest holding is Cameco, a 40-year old, $40 billion Canadian miner; uranium royalty, responsible for about 15 per cent of all global uranium production. Then there are some of the up-and-coming challengers, such as NexGen Energy and Uranium Energy Corp, before a tail of more speculative smaller companies.

The WisdomTree Uranium and Nuclear Energy ETF invests more broadly across the nuclear power supply chain. You’re not just in it for the fuel. It has exposure to the miners, but also to nuclear power infrastructure, such as the firm Doosan Enerbility, which builds reactor equipment, and Curtiss-Wright, which supplies components.

So, two slightly different approaches to the same opportunity. Neither is risk-free. Nuclear projects overrun, geopolitics shifts and public opinion still matters. That is kind of the point, though. There aren’t many investments that combine rising demand, constrained supply and such deep-seated scepticism. Four decades after Chernobyl, nuclear power remains emotionally unpopular, politically awkward, yet economically necessary. The opportunity lies in that paradox.

Ben Kumar is a head of strategy at the investment firm 7IM