Cameco sees surge in nuclear energy demand amid supply chain woes

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Cameco sees surge in nuclear energy demand amid supply chain woes
Credit: © Reuters.

Canadian uranium-fuel provider Cameco (NYSE: CCJ ) is experiencing a significant increase in nuclear energy demand, driven by global calls for clean, secure, and affordable energy. CEO Tim Gitzel attributes this growth to broad-based support for nuclear power across sectors, especially amid supply chain issues and inflation risks.

Recent geopolitical events such as Russia's invasion of Ukraine and the coup in Niger have amplified concerns over the future availability of uranium and its downstream processing. These developments have prompted the World Nuclear Association (WNA) to revise its demand forecast upwards to a 3.6% annual growth rate from 2.6% last year. The WNA is also advocating for a threefold increase in nuclear capacity by 2050 to help achieve the global net-zero emissions target.

Cameco has made significant strides in securing its supply chain, with delivery commitments of approximately 29 million pounds annually from 2023 to 2027. The company holds long-term contracts in both its uranium and fuel services segments. Additionally, Cameco's third quarter uranium production and sales surpassed last year's figures.

The company has also established partnerships with JV Inkai and Kazatomprom (LON: KAPq ) to ensure their production share through the Trans-Caspian International Transport Route, which operates independently of Russian infrastructure. To further safeguard against potential delivery delays, Cameco has stocked up on uranium inventory and set up long-term purchase agreements and loan arrangements.

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