Program and guest
A Kitco News interview at the New Orleans Investment Conference, hosted by Jeremy Szafron, with Scott Melbye, CEO of Uranium Royalty Corp and executive vice president of Uranium Energy Corp. Melbye has more than 40 years of industry experience and previously worked at Cameco. Original English title: Uranium Stocks Fell With AI, but Uranium Doesn't Need AI, Says Scott Melbye. Chapter timestamps in the description: 00:47, 02:26, 04:30, 06:41, 12:08, 13:48, 14:54, 16:41, 19:35, 20:58, 22:08, 23:49.
Key points
- A severe disconnect between share prices and fundamentals: the long-term uranium price hit an all-time high in August, yet uranium stocks are still falling, partly because they have been grouped into the AI infrastructure basket and move with technology stocks. But that is precisely an entry opportunity 0:58
- Uranium doesn't need AI: 440 reactors are operating worldwide and 70 are under construction. Even if not one more reactor is built for data centers, the uranium shortfall over the next 20 years will be 1.7 billion pounds. The billions of dollars Microsoft, Amazon and Google are spending to restart reactors, upgrade units and build small modular reactors are merely an added benefit 1:43
- US utilities bought uranium last year at an average of about 58 dollars per pound, while newly signed long-term contracts are already at 95–100 dollars per pound. Yet 186 million pounds of demand over the next 10 years remain uncontracted. Utility inquiries have recently risen markedly, and much of leading supplier Cameco's future capacity is already locked up, leaving utilities to consider new producers that have yet to begin construction 4:50
- The US National Nuclear Security Administration says defense uranium inventories will be exhausted in 2030–2040. The Department of Energy plans to purchase 4 million pounds of uranium annually starting in 2030, and treaties require it to be of US origin. This is a direct benefit for US producers such as Uranium Energy Corp 4:01
- The Russian uranium ban takes full effect on 1 January 2028 and cannot be circumvented with waivers: it is a trade remedy rather than a sanction, was passed unanimously by Congress and signed by Biden, and would require new legislation to repeal. The ban marks the start of a post-Russian supply era, in which prices could be stronger and Western conversion and enrichment capacity could be stimulated 13:29
- Small modular reactors are no longer concept cars: the Defense Department's “Project Janus” aims to deploy microreactors at military bases by 2028–2029. The Kemmerer project backed by Bill Gates and GE Hitachi Vernova's Darlington project are also moving forward; nuclear power occupies a special space of bipartisan consensus in the US 22:55
Background and notes
The interview also covers uranium price history (after the Cigar Lake flood in 2006, uranium rose from about 60 dollars to 136 dollars per pound), the risk that Kazakhstan's supplies are controlled by Russia and China, Uranium Energy Corp's plan to build a US uranium refining and conversion plant with annual capacity of 10 thousand tonnes, and the approximately 20–30% premium for US-origin uranium. Subtitle coverage: the video has 737 timestamped subtitle segments, covering 0:00 to approximately 25:26 (total length 25:46), covering virtually the entire video. The views and timestamps in this article are paraphrased from the original subtitles; each timestamp marks the start of the segment containing the corresponding remarks.