How To Invest In Uranium

Key takeaways

• Uranium investments soared after Japan announced it would reopen its nuclear power plants and fund next-gen nuclear tech
• Uranium investments are both risky and profitable – but first, you have to know how to invest in uranium
• Some of the best options include mining stocks, uranium-focused ETFs and nuclear or green energy funds

Many people know uranium as the primary fuel for nuclear power plants. Uranium’s radioactive properties allow it to produce massive amounts of emissions-free energy at greater reliability than wind and solar.

Unfortunately, uranium also has a dark side, as the 2011 earthquake-tsunami-Fukushima reactor meltdown trio illustrated. Following the catastrophe, Japan shuttered its nuclear power plants, with many countries following suit or re-evaluating their own nuclear plans. Uranium prices plunged as demand fell while supplies increased.

But now, it appears that uranium is having a moment – one that may propel the globe into a clean energy future. (And power investors’ profits along the way.)

And it all starts with Japan.

One meltdown to cue the fall

Just over a decade ago, Japan was considered the apex of the global nuclear energy boom. It boasted dozens of nuclear power plants, minimizing the mineral-bare country’s reliance on imported energy sources like coal and fossil fuel.

Then, in March 2011, a record-breaking earthquake sent a 46-foot wave crashing into Japan’s Fukushima Daiichi nuclear power plant. The wave knocked out emergency generators and sent several of the plant’s uranium cores into partial meltdown.

Nuclear power plant meltdowns are incredibly rare, and the risks are declining as technology races to meet the science. But when they do happen, they can be catastrophic – and lead to substantial policy changes.

Hot on the heels of catastrophe, Japan shuttered all of its nuclear power plants. Following the fallout, many major nations follow along, shutting down reactors or rethinking their nuclear plans. As a result, the global nuclear power industry ground to a screeching halt – and dragged the uranium industry with it.

New hope for nuclear

Since 2011, Japanese public opinion toward nuclear energy and expansion has soured. In 2021, nuclear power plants produced just 7% of the country’s energy supply.

And then, the global energy crisis hit.

Lifted lockdowns and extreme weather around the globe increased demand for fossil fuels, while the Russia-Ukraine war dramatically slashed supplies. Since Japan suffers a dearth of native fossil fuels and isn’t connected to mainland power, the country’s imported energy costs have soared.

As elevated fuel prices and extreme weather slam households (and budgets), public opinion appears to be shifting – and taking government policy with it.

On 24 August, Japan’s prime minister Fumio Kishida announced that his administration would restart 7 of the country’s suspended reactors. That brings the country’s total to 17 online reactors (out of 33 operable). Additionally, officials will consider extending the lifespan of existing reactors beyond the current maximum of 60 years.

Said Kishida about this change of policy: “In order to overcome our imminent crisis of a power supply crunch, we must take out utmost steps to mobilize all possible policies in the coming years and prepare for any emergency.”

Japan’s Economy and Industry Minister, Yasutoshi Nishimura, agrees. “It is extremely important to secure all options to redesign a stable energy supply for our country. From that perspective, we will also consider all options regarding nuclear power.”

Global implications

Japan’s announcement represents a significant policy shift to address issues, among them soaring prices, strained supplies and extreme weather. Japan isn’t alone – and the country’s shifting stance could compel other nations to reconsider, as well.

Already this year, outlets have reported that Germany is rethinking its decision to shut down its reactors amid a gas shortage. Belgium plans to extend the life of two reactors by over a decade. India plans to build a “mega-reactor” to drive its shift from coal to clean energy, while France plans to construct 14 starting in 2028.

But it’s not just about money.

As more countries shift to clean energy, safe, affordable, zero-emission nuclear power looks more appetizing every year. And, as the Russia-Ukraine war has highlighted, modern countries need dependable energy supplies – supplies that, for many, are now threatened or extinguished.

Nuclear energy promises to fill these gaps as smaller, safer, more efficient models hit the market. The United States recently buffed its nuclear sector with $30 billion in tax credits to encourage nuclear power. As more countries pour capital into these next-generation investments, the power – and profit – potential could be enormous.

That’s exactly what uranium investors are betting on.

Uranium’s big comeback

Following the Fukushima disaster, the price of uranium – the crucial ingredient of nuclear power – plummeted.

Two of the world’s largest uranium miners, Cameco and Kazatomprom, slashed production to support prices, with little success. As a result, uranium has largely remained a no-go for investors.

Some of that changed in 2022 as the global focus turned to low-emission renewables and cheaper alternatives to Russian fuel. Uranium investments faltered again when Kazatomprom announced plans to boost production in 2024, stoking fears of a surplus and depressed prices.

But following Japan’s announcement, it appears the world may be ready to reckon with its nuclear power concerns. With long-term demand poised to meet increased production, miners, investors and the future of green energy may be in for a sweet surprise.

For investors, some of that surprise is already past.

Uranium stocks skyrocketed on the heels of Kishida’s remarks.

The Global X Uranium ETF surged 11.5% on Wednesday’s announcement and sits up 16%. Uranium Energy is up a whopping 30.3% since last Wednesday (gaining 14% Monday Alone), trailed closely by giant Cameco’s 27% gains.

How to invest in uranium

Built and maintained properly, uranium power plants can generate tons of safe, efficient and even profitable energy. However, knowing how to invest in uranium isn’t quite as straightforward as investing in stocks. Your options are also far more limited – and you certainly can’t buy and store it like gold.

That’s not to say that you can’t invest in uranium. You just have to know where to look.

How to invest in uranium stocks

One of the easiest ways to invest in uranium is through uranium-related stocks. Big mining and production companies like Cameco, Kazatomprom, BHP and Rio Tinto all offer uranium exposure in the stock market. You can also invest in smaller or more niche companies like Uranium Energy Corp and Yellow Cake PLC.

Investing in uranium stocks provides many of the common benefits of the stock market, including liquidity and ease of access.

However, mining companies come with unique risks, including moral, political, environmental and social responsibility concerns. You may want to research to ensure that the companies you invest in align with your values.

How to invest in uranium ETFs

If you prefer to avoid the perils of stock picking, you can jump into uranium via exchange-traded funds (ETFs).

Aside from uranium exposure and liquidity, you’ll enjoy extra benefits like automatic diversity. Plus, some funds offer exposure to nuclear or clean energy at large, potentially cushioning volatile uranium prices.

On the other hand, your pickings for uranium-focused ETFs are sparse compared to other industries.

One option is the Global X Uranium ETF, which tracks national and international mining and production firms. You also have the Van Eck Market Vectors Uranium + Nuclear Energy ETF, a market cap-weighted index of uranium players.

Another potential option is the Sprott Uranium Miners ETF, which invests in companies based in the U.S., Canada and Kazakhstan. And the North Shore Global Uranium Mining ETF provides broad exposure to mining, exploration, development, production and uranium storage firms worldwide.

How to invest in uranium futures

For risk-loving investors, uranium futures offer a path to investing in future uranium prices. These derivatives allow investors to lock in the price and date of future financial instrument or commodity transactions. (Note that for investors, uranium futures are financially settled only. In other words, you can’t buy radioactive materials.)

Currently, futures are crucial to uranium markets establishing a semblance of price transparency and expectations. They also provide investors with a marketplace to enjoy direct exposure to uranium investments.

However, uranium futures are also limited – and particularly risky. Already futures contracts are generally recommended as experts-only investments, and uranium’s additional illiquidity means that most investors should stay far, far away.

Looking at unusual uranium investments

Uranium investors can also look into slightly more unusual investment options.

For instance, there’s the Sprott Physical Uranium Trust. This publicly-listed fund lists units that trade like stocks, with each representing a physical allotment held by Sprott.

There’s also the Uranium Royalty Corporation, which makes physical uranium purchases and invests in uranium-based companies in exchange for royalties. The company provides crucial capital to the uranium mining industry while providing easy(ish) access for everyday investors.

Knowing how to invest in uranium doesn’t mean you should

With many major nations rethinking their approach to clean, affordable energy, nuclear power plants are an obvious option. That’s good news for uranium investors, as more nuclear power means more demand for the radioactive metal.

Unfortunately, uranium isn’t investment-grade in the same way that beef or gold is. While a handful of stocks and funds provide direct or indirect exposure, they also come with unique risks both in your portfolio and out.

Instead of going all-in on uranium, Q.ai offers a variety of Investment Kits to help you reach your goals. For instance, the Clean Tech Kit lets you invest in the future of zero emissions (and sleep well doing it). And for those who want to invest in precious mined goods, our Precious Metals Kit provides all the shiny exposure you need.

Download Q.ai today for access to AI-powered investment strategies. When you deposit $100, we’ll add an additional $50 to your account.