How Will the US Election Affect Uranium Prices?

October 30, 2020 10:30 AM PST

Pollsters may tell you otherwise, but the outcome of the US election is still very much up in the air. Though, one thing is certain: markets will be affected.

After Biden's debate promise to transition away from oil, energy markets have entered the spotlight. Uranium, in particular, is one sector that stands to shift dramatically in the wake of Nov. 3. In response, insiders are trying to position themselves effectively for a potential sea change in an industry that's been awaiting its breakout moment for years.

To get a bead on the uranium landscape amid what's sure to be a turbulent US election, we spoke to Jordan Trimble, the CEO, President, and Director of Skyharbour Resources (TSX-V: SYH). As an industry insider with skin in the game, he offers an interesting perspective on the linkages between Trump, Biden, and the future of uranium energy.

Q: What is the state of the uranium industry leading into the US election?

JT: The underlying supply demand-demand fundamentals for uranium are the strongest we have seen in a long time and dictate that a uranium price increase is needed. In the last few years we’ve seen a major supply side response play out with low uranium prices forcing production/supply curtailment which has been exacerbated by the pandemic. At one point earlier in the year, almost 50% of primary mine supply was offline as the virus caused several operations to shut down temporarily. The uranium mining industry globally is reliant on supply highly concentrated both geologically and geographically and this makes the risks to the supply side far greater than the risks to the demand side.

The world’s largest producers of uranium, Kazatomprom (the world’s largest producer headquartered in Kazakhstan) and Cameco (the second largest produced headquartered in Canada), have scaled back operations and have become buyers directly in the spot uranium market to make up for this decreased production. At the current $30 per pound of U3O8 it is more profitable for them to buy in the spot market and sell into their higher priced contracts with nuclear utilities. Furthermore, much like we have seen leading up to previous uranium bull markets, there has been significant underinvestment in new mining projects which will further strain an already reduced supply side for years to come. 

In 2020 there will be approximately 110-120 million pounds of primary mine supply in the backdrop of over 180 million pounds of uranium demand with a cumulative gap estimated to be over 300 million pounds by 2026. This supply deficit that will surely help drive higher uranium prices going forward. 

Shifting over to the demand side, the story has been improving, now exceeding pre-Fukushima levels, and has been outstripping primary supply over the past couple years. Finite inventories and other secondary supplies are being depleted to make up the difference. Furthermore, well over 50% of all utility uranium contracts require renewal before expiry in 2027. Utilities typically have a requirement to renew contracts 18-24 months before existing contracts expire, and therefore several utilities have recently come to the market with new RFP’s but uranium producers are unwilling to lock in long term contracts pricing their material close to the current uranium price. 

Nuclear reactor demand for uranium is sticky and has been somewhat insulated to the current pandemic versus other sources of electricity generation. It is still the only source of reliable, baseload, emissions-free electricity we have. In addition to the current 441 operating reactors globally, demand is expected to increase on the back of new reactor construction in which there are currently 53 new nuclear reactors under construction. The likelihood of massive fiscal stimulus through infrastructure spending in certain countries, including the US, could add to this number as countries try to boost their economies coming out of the pandemic.

Since 2003 we have experienced 8 periods where the uranium price has spiked significantly over a short period of time - the average uranium spot price increase was 58% over an average of only 6.6 months.  Worth noting is that the current spot price (approx. $30 per pound) is still below the average all-in cost of production (over $40 per pound) and well below the incentive price needed to bring meaningful new production online globally ($50-$60 per pound). All of this bodes well for a rising uranium price and increasing valuations for the relatively small universe of publicly traded and investable uranium mining companies.

Q: How has Trump affected the uranium market during his presidency?

JT: Donald Trump and his administration have been avid supporters of nuclear power and vocal proponents of the industry which will likely continue if he is reelected. Just in the last year there has been positive political and legislative movement on nuclear energy, including passage of the Nuclear Energy Leadership Act, Lifting of the Prohibition on Nuclear Funding, the Department of Energy’s (DOE) funding of the Advancing Nuclear Research Initiative and the Advanced Reactor Demonstration Project. Going back to June of 2018, Trump directed Secretary of Energy Rick Perry to take immediate action to stop the loss of fuel-secure power facilities from the country's power grid, including nuclear power plants that are facing premature retirement. 

One of Trump’s main concerns has been the US nuclear industry lagging those in China and Russia in recent years and the Trump administration has made it known they want to bring America back to the forefront as the global leader in the sector. Dr. Rita Baranwal, DOE’s Assistant Secretary, recently stated: “China and Russia’s aggressive plans to expand into the global nuclear energy sector pose a significant risk to the U.S. economy, energy security, foreign policy, and national security, as well as that of allies. The U.S. is losing its competitive global position as the world leader in nuclear energy to state-owned enterprises of Russia and China that underbid Western competitors.” 

In Trump’s 2021 Budget Plan, it proclaims that nuclear energy is critical to the Nation’s energy mix and the Budget supports an array of programs to advance nuclear energy technologies. This plan promotes revitalization of the domestic industry and the ability of domestic technologies to compete abroad with the budget providing $1.2 billion towards R&D and other important nuclear energy programs. One such initiative is the DOE’s aggressive timeline (five to seven years) to commercialize new advanced nuclear reactors including Small Modular Reactors (SMR’s). Trump believes nuclear energy is one of the cornerstones of a powerful US economy, as well as a necessary hedge against sector dominance by China and Russia. This is all positive for uranium demand in the US but the big question has been where is the uranium going to come from going forward? 

In 2018, the Department of Interior (DOI) drafted up a list of 35 critical minerals, including uranium, that the Trump administration recognized as increasingly necessary to maintain the economic and military strength of the United States. It's important to discuss the Section 232 petition back in 2018 and 2019 in which American uranium mining companies were pushing for an investigation into the worrisome supply situation in the US in which over 95% of uranium was being imported for America’s nuclear reactor fleet responsible for powering 20% of the country. To alleviate this potential national security issue, American uranium producers were proposing that US nuclear utilities be required to buy 25% of their fuel requirements from domestic sources of uranium. 

The reality of it is that, at current U3O8 prices, no uranium company in the US can produce profitably, so this quota, which was ultimately rejected in July 2019, would have brought on 10 to 12 million pounds of subsidized US supply. One of the unintended consequences of the Section 232 petition and the subsequently formed Nuclear Fuel Working Group was that some US nuclear utility companies decided to stick to the sidelines refusing to enter into new longer term contracts to purchase uranium which historically has been a key catalyst for higher uranium prices. These utilities, like Southern and Duke, had been waiting for some clarity on where they're going to have to buy uranium from and what their purchasing strategy should be going forward. Keep in mind that the US – the largest consumer of uranium globally with 96 operating nuclear reactors – is now having to import close to 100% of its uranium requirements and a significant portion of that is coming from Kazakhstan (the world’s largest producer of uranium accounting for 40% of primary mine supply), Russia, Uzbekistan and Africa. After several years of lobbying and negotiating between nuclear utilities, uranium miners and the government, the Trump administration recognized the national security risk this posed to the country and began addressing it with several initiatives including a 10-year, $1.5 billion uranium reserve budget announced in 2019.

As mentioned, a big chunk of uranium imports to the US are currently coming from Kazakhstan, Uzbekistan, and Russia, three nations that the Section 232 petition deemed to be adversarial and state-sponsored production centers. Just in the last few months as the DOC amended and expanded the Russian Suspension Agreement (RSA) to limit and reduce uranium imports from Russia through 2040 - up to 75% compared to the previous RSA. This is a positive development for any uranium company that has had to compete with Russian imports of uranium into the US over the last several decades.

The bottom line is having some resolution to the Section 232 and Nuclear Fuel Working Group as well as extending the RSA, there is a cloud of uncertainty in the US nuclear industry that has been lifted. It will allow US nuclear utilities to come back to the market, to start buying, and to start reentering long term contracts. However, the US does not have the production capacity to meet even a fraction of its annual requirements and it would take years to ramp up production. It is clear that the seeds the Trump administration have sown could really benefit Canadian uranium companies as bountiful, reliable, secure sources of uranium right across the border.

Q: How do you see the results of the US election impacting the price of uranium?

JT: I believe either outcome will have a positive impact on the price of uranium. It’s important to note that there is bipartisan support for a healthy and growing nuclear industry in the US - a rare occurrence that could foster meaningful bipartisan action and legislation post election. Two major talking points heading into the election have been jobs and energy policy. Both candidates have expressed their support for increased infrastructure spending coupled with reliable sources of electricity generation. Nuclear energy provides baseload (meaning 24/7), emissions-free, low-cost energy; grid and price stability; and anchors local communities with jobs and a tax base. It’s the perfect fit for both political platforms.

Furthermore, the issue of having a secure supply of uranium from both domestic sources and reliable foriegn sources like Canada is also a topic both sides of the aisle can agree on. This is of particular interest to us at Skyharbour Resources as a Canadian uranium company.

Q: What do you see as benefits for the nuclear energy sector with a Trump re-election?

JT: I believe a Trump re-election would be very bullish for the sector and for North American uranium companies. Trump’s motives to reinvigorate the nuclear industry include job creation, providing affordable and reliable electricity to power the US economy, and to compete against the expanding Chinese and Russian nuclear industries. As discussed earlier, the Nuclear Fuel Working Group, established by Trump in 2019, recommended the government support the uranium mining industry through measures including establishing a uranium reserve, streamlining regulatory reform and land access for uranium mining as well as extending the Russian Suspension Agreement to protect against future uranium dumping in the US market. Furthermore, expanding US commercial nuclear power abroad would allow the Trump administration to counter the recent push by the Chinese and Russians to “export” their nuclear industries abroad. Bottomline is more uranium will need to be sourced from economic deposits.

In May, the DOE released a blueprint to transform the US nuclear industry in a report titled “Restoring America’s Competitive Nuclear Energy Advantage”. They are making progress and have recently launched the $230 million Advanced Reactor Demonstration Program (ARDP) currently calling on the private sector to apply to demonstrate they can construct smaller, more efficient, more affordable advanced reactors (Small Modular Reactors or SMR’s) that can be commercially available within five to seven years. The DOE is setting an aggressive timeline to build on existing basic technology that was explored decades ago. Importantly, the topic of advanced nuclear technologies has very strong bipartisan support and this all bodes well for future uranium demand.

Q: What about benefits for nuclear energy with a Biden presidency?

JT: This may come as a surprise but I believe a Biden administration will be very positive for the nuclear industry and for uranium companies supplying the fuel for the reactors. However, Biden’s incentive to see this come to fruition is quite different from Trumps as his push for a thriving nuclear industry will stem from his energy policy and climate change goals which he has been very vocal about. Leading climate scientists agree that climate change without significant nuclear power is not realistic. Therefore, supporting nuclear power is proof of how serious a leader actually is about climate change and would be a clear demonstration that they support real science over mere activism - a quality Biden prides himself in.

Biden wants to make America carbon neutral by 2050 and will rejoin the Paris Climate Agreement. Again, a common thread here is nuclear energy. Biden has announced an aggressive and direct $1.7 trillion climate plan that would also leverage additional private sector and state and local investments to total to more than $5 trillion. Nuclear power is included in this. In particular, Biden’s plan calls for development of SMR’s (something Trump is pushing for as well) and for “leveraging the carbon-pollution free energy provided by existing sources like nuclear.” The plan calls to “Create an Advanced Research Projects Agency on Climate.” This is a new, cross-agency ARPA-C to target affordable technologies to help America achieve his energy target and includes advanced nuclear reactors and SMR’s at half the cost of today’s reactors.

Forbes noted that the 2020 Democratic Party platform marks the first time since 1972 that the Democratic Party has said anything positive in its platform about nuclear energy. It is clear to me that a Biden presidency will be beneficial for the nuclear industry and to uranium demand going forward.

Q: Biden's campaign has proposed what some call an ambitious plan to address climate change. In the latest debate, he promised to transition away from the oil industry. How might uranium and nuclear energy fit in with this strategy?

JT: Watching the debates, the one thing both candidates should agree on is nuclear energy, which is probably why they never directly discussed it. As mentioned above, Biden’s $1.7 trillion budget to fight climate change and the reinstatement of the US in the Paris Climate Agreement can only be positive for the US nuclear industry. As you mention, another hot-button topic Biden has brought up is moving away from fossil fuels. If he does this, the US will need to substitute in another source of baseload electricity to make up for the lost coal and gas power generation. There’s only one practical solution right now for that and it is nuclear.

I’m of the mindset that the green energy push is one of the big things that's going to continue to drive improved sentiment for nuclear power especially under a Biden Presidency. Nuclear's role in combating climate change and improving air quality is going to be very important going forward, and we’re starting to see that narrative change in a positive way. Nuclear is the safest way to make reliable electricity and by some estimates has saved over 3 million lives that would have been lost prematurely to deadly air pollution from energy alternatives. 

Even some well-known, previously anti-nuclear environmentalists are beginning to wake up to the realities of the modern world and the pragmatic solution nuclear provides, especially if the goal is to wean off of fossil fuels. One example is Michael Shellenberger who has become one of nuclear's biggest proponents. He was a Time magazine's Hero of the Environment in 2008 who speaks often on the topic of nuclear energy, and one of the things that turned him into a strong nuclear proponent are real life cases studies and simple facts. For example, when you look at France and Germany, here are two countries that have gone in complete opposite directions with their energy policies. Post Fukushima, Germany announced that the country would phase out nuclear whilst making a major investment into “green, renewable energy”, which, of course, is nonsensical given that nuclear is also emissions-free. 

They've now invested over 160 billion euros into intermittent renewable energy like wind and solar. Unfortunately, it hasn't panned out very well for them and there's been very little progress in reducing carbon emissions. In fact, on a per kilowatt-hour basis, carbon emissions in neighboring France are about 10% of that of Germany. Keep in mind, France is over 70% nuclear and stayed the course with nuclear. Germany is now having to turn back on lignite coal plants which are heavy polluters. And when you look at the costs – not just the 160 billion euros sunk cost into rolling out this green energy plan – you’ll see that Germany’s electricity costs are double that of neighboring France. So emissions haven't gone anywhere, and, in fact, are going up in Germany yet their electricity costs are also going up significantly. This is something that a lot of pragmatic, practical environmentalists are pointing to. Bottom line is nuclear must play an important role going forward in combating climate change and improving air quality, while providing consistent electricity generation for a world that requires more and more electricity. 

It’s simply a matter of energy density. We used to burn wood to generate energy, and then we burnt coal, and then oil and gas, all with increasing energy densities. Now we have uranium as the fuel in nuclear power plants, which has the highest energy density per unit of mass available for electricity generation. Renewables like wind and solar rely on very dilute sources of energy which ultimately translates to massive amounts of land and materials needed to generate the equivalent amount of electricity that nuclear does. Typically wind and solar require 300 to 600 times more land to produce the same quantity of electricity when compared to nuclear power. That is why we are seeing places like China, India, the Middle East, and even some African and South American nations rolling out their respective nuclear programs. We’re talking about large population centers that require a lot of power. Nuclear is the only clean-energy solution to power these cities and countries, and the same applies to the US.

Q: How interdependent are the Canadian and American nuclear energy and uranium mining industries? How are you and your peers in the uranium sector preparing for post-election shifts? 

JT: Skyharbour Resources is one of only a few active Canadian uranium exploration and development companies that is in the business of discovering and advancing the next generation of uranium deposits to fuel nuclear reactors. Our projects are located in the prolific Athabasca Basin of Saskatchewan, Canada, which is host to the highest-grade and largest uranium deposits in the world. Saskatchewan is also consistently ranked as a top mining jurisdiction to work in globally by the Fraser Institute. We have been acquiring top-tier uranium projects at attractive valuations culminating in six properties totaling over 520,000 acres throughout the Basin. We acquired 100% of its flagship, high-grade property, the Moore Uranium Project, from Denison Mines (NYSE MKT: DNN), a large, strategic shareholder of the Company. The Moore Uranium Project hosts the high grade Maverick Zone where recent drilling has returned 21% U3O8 over 1.5 metres within 5.9 metres of 6.0% U3O8. In addition to the Maverick Zone, the project hosts other mineralized targets with strong discovery potential which we plan to test in upcoming drill programs.

While focused on our core strategy as a discovery-driven exploration company, Skyharbour also employs the prospect generator model and brings in partner companies to advance and fund exploration at its other projects in the Basin. We have announced three project partnerships: one with industry-leader Orano Canada Inc. (formerly AREVA), one with Azincourt Energy, and one more recently with an Australian company called Valor Resources. These partner companies fund exploration and development work at our projects and pay us cash and stock to earn a majority interest in the respective projects. Skyharbour also owns the Falcon Point Uranium Project which hosts an NI 43-101 uranium resource. The company is run by a strong management and geological team who are major shareholders with extensive capital markets experience as well as focused uranium exploration expertise in the Basin. Our goal is to maximize shareholder value through new mineral discoveries, committed long-term partnerships, and the advancement of exploration projects in geopolitically favourable jurisdictions.

There has always been a strong interdependence and significant collaboration between the US and Canadian nuclear industries. When it comes to supplying uranium, Canada and the US have a long history of working together - in fact some of the uranium used in the Manhattan Project was from Canada. Today, there is a strong need to find and supply the fuel for nuclear power plants and Canada will continue to be an important source of uranium for US nuclear utilities which don’t want to rely as heavily on concentrated and less geopolitically favourable foriegn sources like those from Kazakhstan and Russia (something both Trump and Biden will push for). As outlined above, I expect this US reliance on Canadian uranium production to increase in the coming years, regardless of the election outcome. Unlike domestic US uranium deposits, Canada’s Athabasca Basin has the highest-grade deposits of uranium in the world which makes them highly valuable and profitable to mine. Furthermore, we have seen increased interest from American investors, both institutional and retail, in our company in recent years. Skyharbour is ultimately looking to find new uranium deposits and then to advance and de-risk these projects to the point where they can be developed and mined to satisfy the needs of nuclear reactors in the US and globally for years to come.

Full Disclosure: Skyharbour Resources Ltd. is a paid sponsor of To learn more about Skyharbour Resources Ltd., you can visit its website at and review its annual information and public disclosure documents on

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