The Junta Shakeup: Uranium Supply Risks Loom | Australian Markets

Over the previous couple of months, I’ve written in-depth concerning the nationalisation dangers throughout the mining industry.

From gold mines in West Africa to Tin mines within the DRC.

As I’ve identified, it’s one other clue that we’re coming into a more bullish part within the commodity cycle.

For higher or worse, resource-rich nations at all times search to extract more of their mineral wealth as commodity costs rise.

That’s the part we’ve entered and why I anticipate battle over minerals to escalate even additional within the years to return.

However one commodity that hasn’t gained a lot consideration in phrases of its ‘supply chain risk’ is uranium. The important thing commodity needed to FUEL the West’s nuclear ambitions. However the place will provide growth come from?

The Uranium Provide Dilemma

To show you what I imply:

Kazakhstan, the world’s largest uranium producer, is closely dedicated to Chinese language contracts.

It’s unlikely to shift these, on condition that China is a main investor within the nation and its mining corporations.

That features Kazatomprom, the world’s largest uranium-producing company, which accounts for round a quarter of world provide.

Then there’s Namibia…

One other important uranium hub.

This nation has develop into a alternative vacation spot for ASX performs like Paladin Power [ASX: PDN], Bannerman Power [ASX: BMN], and Deep Yellow [ASX: DYL].

However right here, too, issues fester under the floor…

The Namibian authorities lately flirted with the thought of useful resource nationalisation, which despatched shivers down the spines of worldwide mining corporations.

As I keep reminding readers, resource-rich nations are likely to elevate this agenda every time the commodity cycle turns upward and useful resource costs rise.

That is what we’re seeing play out worldwide, from copper, gold and uranium.

However essentially the most vital risk to the uranium provide chain may come from this former French colony:

Niger: A Geopolitical Storm

This nation doesn’t get a lot consideration in Australia, but it surely’s price investigating if you wish to perceive the availability chain dangers within the uranium market.

You see, France has maintained an energetic presence throughout its former colonies, particularly mineral-rich West Africa.

Niger is maybe essentially the most important of all.

Over time, France has deployed 1000’s of troops throughout uranium-rich Niger.

This landlocked West African nation holds some of the world’s largest uranium reserves and has gifted France’s nuclear financial system round one-third of its necessities.

And for years, the French, aided by native elites, have bled this uranium-rich nation dry.

Regardless of feeding France with an abundance of uranium which may be become low cost baseload energy, Niger stays one of the poorest international locations on Earth.

Famine, drought, conflict and poverty stay the each day plight of most people right here.

However instances are altering for the French and the West more broadly…

The Junta ‘Shake-Up’

Throughout France’s former colonies, main management modifications are going down.

An Arab Spring of kinds.

New Junta governments are changing former pro-Western dictators.

And these new leaders are likely to despise Western governments and their worldwide mining firms!

Gold miners throughout Mali are waking up to this new actuality.

And in 2023, a coup d’état broke out in uranium-rich Niger, ousting the nation’s President.

Mohamed Bazoum was a cozy ally for the West, a key motive France had entry to low cost, dependable uranium provide.

However as I’ve outlined, that state of affairs is wanting precarious…

In 2024, the new Junta authorities cut navy ties with the US, ordering 1,000 American troops out of the nation.

And since coming to energy, it has cosied up to new allies in China and Russia, nations that are additionally eager to grab maintain of Niger’s uranium reserves.

France is dropping its grip on Niger and West Africa more broadly.

The area has grown drained of feeding the West with considerable assets, receiving little in return.

And that represents a main menace to
France’s vitality security.

For the second, Niger continues to export uranium to France.

However how long that lasts is anybody’s guess!

Roughly a third of France’s uranium provide comes from the Sahel…

A dispute that creates a sudden provide disruption will devastate France’s vitality security.

But, governments, buyers, and the West aren’t paying enough consideration to this menace.

That’s why uranium stays a strong long-term alternative for buyers. However as I’ve outlined, you need to tread fastidiously.

I’ve recognized one uranium play free of these geopolitical dangers.

Given the steep sell-off throughout the uranium market over the previous couple of months, its ‘risk-free’ premium has light. That makes it a great time so as to add this stock.

For those who’d like to seek out out more, you are able to do so right here.

Take pleasure in!

Regards,

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