Shares in local uranium stocks rallied at the open on revelations that United States President Donald Trump will today sign executive orders designed to kickstart the nuclear energy industry.
Today’s executive order will see Trump invoke the Cold War-era Defence Production Act - to declare a national emergency over U.S. dependence on Russia and China for enriched uranium, nuclear fuel processing and advanced reactor inputs.
The net effect will be an easing of regulatory processes for approvals for new reactors and strengthening the fuel supply chain.
Trump has espoused the view that uranium imports are a threat to U.S. national security for many years.
AI boom underpins surging power demand
Underpinning Trump’s renewed interest in nuclear power is an unprecedented rise in power demand in 20 years due to the power-hungry artificial intelligence boom.
Chris Wright, the energy secretary, compared the race to develop the power sources and data centres needed for AI as something akin to "Manhattan Project 2" – the former being the massive U.S. program during World War II to develop atomic bombs.
As well as directing the Departments of Energy and Defense to identify federal lands and facilities for nuclear deployment, Trump’s executive order also encourages the Energy Department to use loan guarantees and direct loans to increase reactor buildout.
Last week, the U.S. Interior Department claimed that a proposed uranium mine in Utah would be subject to only a 14-day federal review period, shortening what is commonly a years-long process.
State hurdles
However, while the Trump administration has two long-stalled uranium mines near New Mexico’s Mount Taylor planned, a robust state review process may prove to be a major stumbling block.
“I think that the realities weigh against the administration’s ignorant and uninformed policies that suggest to the public that these kinds of projects will happen overnight,” said Christopher Shuey, a public health researcher closely monitoring uranium developments here. “They won’t.”
Even if the federal government tries to fast-track mining in New Mexico, DJ Ennis, program manager for the state’s Mining Act Reclamation Program expects the state to take its time and fully review both mine proposals, which it is empowered to do under the 1993 New Mexico Mining Act, and in lieu of a federal law.
While the U.S. was the first nuclear power developer, the energy source is now growing the fastest in China.
Local stocks enjoy updraft
Meanwhile, despite the complexities surrounding Trump’s nuclear power ambitions, the local excitement has made three Australian uranium stocks some of the best performers across the ASX 200 today. These include:
- Boss Energy (ASX: BOE) up 12%: The stock has a market cap of $1.6 billion; the share price is down 26% over one year and up 67% in the last month.
The stock is in a strong bullish trend confirmed by multiple indicators. Specifically, a 5-day moving average of the stock price is above the 50-day moving average.
Consensus is Moderate Buy.
- Deep Yellow (ASX: DYL) up 8.7%: The market cap is $1.2 billion; the share price is down 26% in one year and up 50% over the last month.
The stock appears to be in a strong bullish trend as confirmed by multiple indicators.
Consensus is Moderate Buy.
- Paladin Energy (ASX: PDN) up 8.6%: The stock has a market cap of $2.3 billion; the share price is down 64% in one year and up 48% in the last month.
The stock appears to have completed a medium-term rally that pulled the 5-day moving average above the 50-day moving average.
Consensus is Moderate Buy.
Not entirely banned in Australia, uranium mining is currently permitted in the Northern Territory and South Australia, while Western Australia and Qld have bans in place.
While uranium mining was prohibited by the WA government in 2017, four remote operations were given exceptions to the ban as they were approved before Labor were returned to power earlier that year.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
