Episode Details

Uranium is “a very unique commodity” that even at $100 a pound is still seeing a supply deficit, says John Ciampaglia, CEO of Sprott Asset Management.  

In February Ciampaglia spoke to Kitco Mining at the BMO Global Metals, Mining & Critical Minerals Conference 2024 in Hollywood, Florida.  

“We don't see a real meaningful supply response coming for the next few years and in the absence of that we think uranium prices are going to be higher for longer,” he said.

Ciampaglia said uranium is being recognized for its importance in achieving three goals: decarbonization, energy security, and as a complement to renewable energy. Nuclear power has a capacity factor of 92.5 percent, making it suitable for base-load power, compared to solar’s 25 percent.

“Countries realize that they need to have a diversified source of energy production in order to have a grid-stable economy and affordable energy prices,” he said.

The uranium market is dominated by a handful of countries, most of them unfriendly to Western interests. “It’s a very concentrated supply profile which makes it more vulnerable to shocks,” Ciampaglia said, adding: “I think the West has realized that they need to incentivize the reshoring of a lot of supply chains. Uranium mining is one of them.”

Several uranium producers are re-starting mines to capitalize on higher prices. This should trickle down to the uranium explorers, said Ciampaglia. “They have a fighting chance to actually raise some capital and move their projects down the pipeline.”

Sprott is bullish on copper, having recently launched a copper ETF. Ciampaglia noted that energy transition-related demand has held up the price. “We think there is going to be tremendous long-term durable demand for copper,” he said. “Investors are becoming increasingly interested.”

Ciampaglia said copper is like uranium in that both face deficits and both need significant amounts of capex (capital expenditures); the only way for that to happen is higher prices. However, “the demand for uranium is completely inelastic, it's unlike most other commodities,” he said. “And then I think copper is going to be the slower, emerging story that that is going to play out for the coming years.”

Coverage of the BMO Global Metals, Mining & Critical Minerals Conference sponsored by First Majestic Silver (NYSE:AG).

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.