Why U.S. Uranium Stocks Are a Good Bet Amid Russia-Ukraine War

What are the dynamics of the U.S. uranium supply chain and what are the best U.S. uranium stocks that you can consider now amid the Russia-Ukraine war??

Mohit Oberoi, CFA - Author

Mar. 23 2022, Published 8:18 a.m. ET

Uranium Energy Corporation facility and logo
Source: Uranium Energy Corp Twitter

Uranium is among the commodities that have seen upwards price action amid the Russia-Ukraine war. What are the dynamics of the U.S. uranium supply chain and what are the best U.S. uranium stocks that you can consider now?

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While the U.S. banned the imports of oil and gas from Russia, the country continues to import uranium. Republican senators have introduced a bill to ban the import of uranium from Russia. Reports suggest that Russia is considering banning exports of uranium to the U.S.

The U.S. has the highest number of nuclear reactors.

The U.S. has 90 nuclear reactors, which is the highest in the world. Nuclear power accounts for around a fifth of total electricity generation in the U.S., which is almost twice the global average. However, the country doesn't rank high on uranium reserves.

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Also, U.S. uranium production has been falling. According to the EIA, the total employment in the country’s uranium production industry in 2020 was only 225 full-time person-years, which was 19 percent lower than in 2019.

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The U.S. relies on uranium imports.

Kazakhstan and Canada, the two countries with the biggest uranium reserves, are the largest uranium suppliers to the U.S. They supply roughly 22 percent each of the country’s uranium needs. Russia was the third biggest uranium supplier to the U.S. and accounted for 16 percent of the country’s uranium requirements in 2020. According to the EIA, the total U.S. production combined with five other countries accounted for only 14 percent of the total uranium purchases in 2020.

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There are three major uranium mining companies in the U.S.

There are three major publicly traded uranium mining companies in the U.S.

  • Energy Fuels Inc. (UUUU)
  • UrEnergy (URG)
  • Uranium Energy Corporation (UEC)
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Energy Fuels is the largest uranium company in the U.S. It has the highest licensed mines, in-ground reserves, and production capacity among all the U.S.-based uranium producers.

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UrEnergy owns the Lost Creek in-situ recovery uranium facility in Wyoming. After the amendment to its license in 2021, it can produce up to 2.2 million pounds U3O8, which is a compound of uranium. The company expects additional approval for its expansion in 2022. Its in‑situ recovery facility at the Shirley Basin Project is also construction-ready after receiving all major approvals.

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Uranium Energy Corporation acquired Uranium One America in 2021 in an all-cash deal. It also has two production-ready platforms in Wyoming and South Texas.

The U.S. has considered building a strategic uranium reserve.

The Trump administration contemplated building a strategic uranium reserve, an idea that even the Biden administration has supported. The data reveals a massive problem in the U.S. uranium supply chain. Domestic production accounts for less than 10 percent of the demand while Russia and former Soviet countries Uzbekistan and Kazakhstan account for half of the supply.

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Such heavy dependence on Russia and its allies for a mineral as crucial as uranium has alarm bells ringing. Russia has almost become a rogue nation that has the dubious distinction of being the world’s most sanctioned country, even ahead of Iran and North Korea. As the U.S. tries to bolster its domestic production and work towards import substitution, domestic uranium manufacturers might see better days ahead.


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