Ending Mining Bans: Will WA Uranium Stocks Surge? | Term Deposits

This text caught my consideration final week:

‘Nova Scotia moves to lift decades-old uranium mining ban’

You may learn the complete article right here.

In the event you can’t get previous the paywall, right here’s a fast snapshot of what’s coated:

Novia Scotia, a province sitting off Canada’s southeast coast, initially banned uranium mining within the early Eighties.

Nevertheless, in a latest coverage shift, the federal government has been pushing to carry these bans, partly in response to rising neighborhood assist.

Undoubtedly, the will to monetise its reserves and increase financial resilience is a huge motivator, too.

So, two key inquiries to ask:

Why is that this coverage shift occurring proper now?

AND

What does it signal for Australian states that proceed to dam uranium mining?

Mining Memo’s Take

Cash talks.

When metallic costs rise, neighborhood sentiment for mining tasks tends to increase.

Earlier issues, like radioactive contamination of groundwater, are being changed with bullish outlooks for uranium costs and the windfalls on offer!

The uranium bull thesis has arrived. And residents, governments, and corporations wish to get on board.

So, how does this offer helpful insights for Aussie traders?

Nicely, Nova Scotia is a prime instance of what might occur in Australia quickly.

WA, Victoria, Queensland, and NSW all maintain related bans on uranium mining.

However as costs rise and public assist for nuclear power good points traction, I think more governments will step back and permit mining to happen.

That’s as a result of, as the chance price begins to weigh deep, residents will query why they aren’t capitalising on the worth of their natural assets.

However there’s one other concern at play right here…

Uranium provide trying skinny throughout the West

Kazakhstan, the world’s largest uranium producer, is firmly below the grip of China.

The Center Kingdom has poured billions into Kazakhstan’s development as half of its One-Belt-One Highway initiative.

Chinese language companies additionally maintain main stakes in Kazakh uranium corporations and are main consumers of their ore by long-term offtake agreements.

In the meantime, Europe’s decade-long uranium provide chain from Niger is unwinding.

The new navy Junta has a sturdy anti-Western flavour and is clearly pivoting future offers with China and Russia.

In the meantime, Namibia, one other important uranium mining hub, shocked the market in 2023 when rumours surfaced about authorities plans to nationalise its mines.

Buying and selling in Paladin Vitality [ASX:PDN] was briefly suspended after its share price cratered 20% in a single session. It’s one of a number of ASX uranium performs uncovered to Namibian belongings.

However because the West pursues nuclear ambitions, it has left its commodity provide chain unchecked — but again!

That’s why Australia and Canada can be essential — two main sources of uranium ore.

Nevertheless, like Canada, Australia’s angle towards uranium mining is combined. Nevertheless, as the instance from Novia Scotia reveals, sentiment is shifting.

Western Australia: A key participant

During the last twenty years, the Western Australian authorities has flipped and flopped over its angle towards uranium mining.

Each side of the political divide have put in bans through the years. And for now, a blanket ban stays in place on all NEW mining uranium tasks.

Will that final?

Nicely, when you think about the fruits of components hitting directly…

Like greater uranium costs, rising public sentiment for nuclear energy, and the need for the West to secure provide chains…

There’s a case to be made for the WA authorities to carry these bans.

And that’s exactly what WA’s liberal opposition get together intends to do if it wins the state election NEXT month.

So, what would a coverage shift doubtlessly imply for shares holding uranium belongings in WA? Wouldn’t it end in an immediate re-rating?

Maybe. However it can take time to revive the market’s confidence. In spite of everything, the WA authorities has lifted and re-instated bans a number of occasions.

I, for one, will keep my deal with shares positioned in locations with a historical past of authorities assist… There’s already enough uncertainty on this sector!

Given the deep sell-off that’s taken place in latest months, high quality no longer calls for a steep premium.

That is a market ripe for accumulating shares in areas with regulatory certainty.

Worth is all over the place on this market, so there’s no need to compromise on high quality.

You need to deal with the best uranium shares on your portfolio.

I’ll have more to say on that subsequent week.

Keep tuned!

Regards,

James Cooper,
Editor, Mining: Section One and Diggers and Drillers