I’ve often talked about these fundamentals and rather than repeat them here, what I recommend is you read a recent article on Bloomberg that I personally found very compelling.
The article is about Paladin Energy and its potential as a takeover target and in discussing this subject the journalist, who has clearly done his research, delves into great depth about the nuclear industry and uranium markets – particularly in terms of where things are headed.
As the Bloomberg article points out - bringing new uranium production online can take many years. With demand increasing and countries like China rushing to secure uranium sources, increased merger and acquisition is not only likely, it’s already taking place. For example, Two of China’s three state backed companies charged with building China’s nuclear power plants - China National Nuclear Corp., and China Guangdong Nuclear Power Group Co. - have already begun to acquire overseas suppliers of uranium.
The nuclear energy industry is moving forward aggressively. In my opinion it’s only a matter of time before the uranium market is forced to catch up and the pressure for that to happen is increasing.
Dev Randhawa
