Why Invest in Uranium?

Uranium?? ... Puzzled stare.

That was the reaction I got as I was discussing the merits of uranium as a compelling investment today. I'm not at all surprised from the reaction because, it is, after all, such an unusual investment idea. As far as the general public is concerned, uranium is a radioactive no-no. But I believe that the phobia surrounding the radioactive metal will soon change as it become more and more apparent that the benefits derived from it's use far exceed any potential disasters.

I've decided, at this juncture that instead of rehashing, in my own words, all of the fundamental reasons for the increasing role of nuclear power in our future, (and therefore a necessary component of your portfolio); I'm going to provide links to the writings of other authors who have already written on the topic in a far more comprehensive and convincing manner than I believe I am capable of. So here goes...

A picture is worth a thousand words...



How it all works
*Howstuffworks "How Nuclear Power Works"


Worldwide energy consumption is increasing and will continue to increase
*EIA - Press Releases
*Asian Growth Fuels 20 Year Climb in World Energy Use
*World energy use keeps rising

Hysteria of 'Global Warming' requires a clean energy source.
Nuclear energy is clean!!
*Wired 13.02: Nuclear Now!
*Nuclear Energy Institute - Environmentalists
*Jack Spencer - Nuclear Safety Paranoia - washingtonpost.com

Nuclear Power is Cheap-
Coal is the most abundant and cheapest but it is very dirty. Natural Gas is clean but difficult to transport and expensive. Oil is just expensive.

*Reasons for Using Nuclear Power As an Energy Source
*NUCLEAR NOW ( 3-Jan-2008)
*Nuclear fuel becomes cheapest energy source :: Future Energies :: The future of energy

Nuclear Power is Safe
*Safe Nuclear Power and Green Hydrogen Fuel
*Safety of Nuclear Power Reactors
*Jack Spencer - Nuclear Safety Paranoia - washingtonpost.com

Chernobyl disaster was over-exaggerated. Absolutely excellent speech by the famous Michael Crichton. I believe I posted this somewhere else on the site?
*MichaelCrichton.com | Complexity Theory and Environmental Management

Nuclear energy has become politically correct again. Even Patrick Moore, a founding member of GreenPeace and once a critic of nuclear energy is supporting nuclear.
*Patrick Moore (environmentalist - Wikipedia, the free encyclopedia)
*Going Nuclear
*Co-Founder of Greenpeace Envisions a Nuclear Future
*Greenspirit Strategies: An Environmentalist Revisits Nuclear Energy

There are MANY new nuclears being built, being commisioned to be built, being planned to be built in the world.
*Nuclear power surge coming | csmonitor.com
*2 neuclear power plant sites chosen in North China
*China plans new nuclear plants - UPI.com
*Reactors? We'll Take Thirty, Please
*Plans For New Reactors Worldwide



The price of uranium is only a small component to the total cost of running a nuclear reactor, as such the rise in uranium price does very little to decrease the demand for uranium. So the implications are a sustained high uranium price. It is absolutely imperative that a nuclear reactor has enough fuel to function and will pay steep prices to secure long term contracts. So how do you profit from this trend?

1. Invest in the conglomerates that build the reactors. I'm not expert on this topic and I personally have no interest in going this route, but for those of you who are, you can look into the following companies as a start: GE, Hitachi, Areva, Siemens, Toshiba

2. Since it is illegal to physically own uranium, and impractical because it would be hazardous to your health, you can buy shares in Uranium Participation Corp (U.TO) which is a proxy for the spot price in uranium, which you saw above. I believe each share represents one pound.

3. My favorite play currently is to invest in the closed-end investment funds that I wrote about here: http://www.gold-speculator.com/gold-...-bargains.html
To me they are a compelling investment opportunity because they hold some of the best pure-play investments in the sector and are trading below or close to their Net Asset Values. It doesn't get any better than that!!

4. Invest specifically in uranium exploration companies that will benefit from finding a large, economic uranium deposit. This path of course, is not recommended for most. This is where I like to play, since I'm comfortable with the risk/reward potential involved. Although, I should add that you should never speculate with money your not willing to part with. I will on occassion write my musings on companies I come across in the future, either in this section or in the Mining Index forum.

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