Demand for nuclear energy continues to translate to profits for uranium producers, with Kazakhstan-based Kazatomprom being the latest beneficiary. The company saw its third-quarter pre-tax profit double due to rising uranium spot prices.
As the Wall Street Journal noted, pre-tax profit rose to 222.08 billion Kazakh tenge, or $441.8 million, versus 99.25 billion tenge last year, or over $190 million. Additionally, uranium sales are up, supporting the increased demand for nuclear power as a viable energy source.
“This was largely driven by a 24% increase in volumes sold externally. The average price realized rose 26% in the year due to significantly higher market uranium prices, as announced earlier this month,” WSJ noted.
Big tech companies have been one of the latest consumers using nuclear energy to power their ambitious artificial intelligence (AI) plans. AI requires a copious amount of energy that electricity may not be able to handle by itself. This allows nuclear power to be worthy of consideration.
“The sharp increase this year has been driven by improved sentiment for nuclear energy as a power source for electricity-hungry AI data centers and to combat energy-security issues,” the WSJ report confirmed.
That hunger for power is also helping to restart nuclear power plants here in the United States, such as Three Mile Island. In addition, the U.S. Energy Information Administration expects nuclear mining to grow at an expansive rate as more uranium will be necessary to meet increasing demand.
Diversified Mining Exposure in One Fund
Kazatomprom is one of the largest holdings in the Sprott Uranium Miners ETF (URNM). The fund offers exposure to other companies involved in the mining and exploration of uranium, thereby eliminating concentration risk via exposure to a single stock. As such, URNM offers diversification for investors seeking to capture the upside growth that uranium brings.
Per its baseline fund description, URNM tracks the North Shore Global Uranium Mining Index. It invests in global firms that mine, develop, and produce the metal. It also invests in firms that hold the physical metal or royalties from it. The fund is an ideal pathway for investors to get exposure to rising prices of the element. It also provides a portfolio diversification tool, allowing uranium exposure without investing in the commodity itself.
Past performance is no guarantee of future results. One cannot invest directly in an index. For the latest standardized performance and important risk disclosures regarding Sprott investment products, including each fund’s prospectus, which should be read carefully before investing, please review each product’s webpage by clicking on the corresponding ticker:
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URNJ, COPP, COPJ, NIKL, SGDM and SGDJ
Physical Bullion: PHYS, PSLV, CEF and SPPP
