January 10, 2023
Welcome to Tuesday! Let's dive in.
1 big thing: Uranium mining blows up
Investment and merger activity in the uranium mining sector exploded in 2022, triggered by renewed concerns around energy security, Alan reports.
Why it matters: Investors are rushing to secure critical raw materials — especially for a new generation of advanced reactors.
What's happening: Global investment in uranium mining leaped past $1 billion last year, a 5x jump from 2021, per PitchBook data.
State of play: Deep Yellow acquired Vimy Resources for about $492 million in August.
- Uranium Energy Corporation bought UEX for around $182 million, also in August.
- Encore Energy and Uranium Energy Corporation purchased several projects last year.
Driving the news: The flurry of activity traces to Russia's invasion of Ukraine last February.
- Russia was a top producer and processor of uranium. International sanctions upended that supply chain.
- Similar sanctions on Russian natural gas exports, meanwhile, sent energy prices to the stratosphere, particularly in Europe — stoking renewed interest in nuclear energy generation.
Meanwhile: The Department of Energy and Congress took steps to spur investment in U.S. uranium production and nuclear energy.
- Nuclear is an unusually capital-intensive sector with long timelines. The federal funding and incentives were crucial to last year's deal-making.
Be smart: Russia's invasion was especially vexing for startups developing new nuclear reactors.
- Russia was the only large-scale supplier of what's known as HALEU, a type of enriched uranium for advanced reactors being developed by companies such as TerraPower and X-energy.
- TerraPower announced last month that it would have to delay its project timeline by at least two years due to the new supply chain challenges.
- Investors and companies are meanwhile rushing to build alternative sources of supply — with support from the DOE.
Bottom line: "Private capital for nuclear is being driven by bipartisan support for different policies to enable different next-generation technologies and current technologies," Niko McMurray, managing director of public policy at ClearPath, a D.C.-based nonprofit that advocates for nuclear energy, tells Alan.