Cameco: The Cornerstone Of The Nuclear Renaissance

As climate change becomes a growing concern in most countries, decarbonizing our energy supply is becoming more pressing. A lot is being done with renewables, but still not enough.

With climate change becoming a major concern in most countries, the need to decarbonize our energy supply is becoming more pressing. A lot is being done with renewables, but still not enough. The issue of renewables intermittency will still take a while to be solved with utility-scale battery storage.

The problem is compounded by growing energy demand from AI and the electrification of everything, from transportation to industry and heating/cooling. This means that not only do we need to decarbonize power generation, but we likely need to at least double or triple electricity generation as well for our future energy mix to work.

Overall, we are likely to need all the possible low-carbon solutions we can deploy sooner rather than later. Part of this growing electricity production will need to be very stable baseload generation.

This demand will most likely need to be satisfied with nuclear power. And no other company in North America (or even the West at large) will be as instrumental in making it happen as Cameco.

Cameco Corporation (CCJ)

Nuclear Industry's Outlook

For a while, the incidents of Chernobyl and Fukushima were seen as proof that nuclear energy was just too dangerous. Still, before them, there was a time when it seemed clear that the future was nuclear and that burning coal, oil, and gas would soon be as obsolete as the Netherlands' picturesque windmills.

Nuclear power production stopped growing in the late 1990s post-Chernobyl and has stagnated globally since, with China's growing production compensating for the declining European nuclear industry.

For many years, only China and Russia seemed willing to develop nuclear energy. Especially China, which is, as The Economist put it, “building nuclear reactors faster than any other country”.

The Ukraine war, a global energy crisis, and the realization that decarbonization with renewables only will take too long is quickly changing the perception of nuclear.

So today, nuclear energy is making a comeback globally, at a scale unimaginable a few years ago, with many news pointing at a change in policies throughout most of the world:

All this talk about a nuclear renaissance was before the AI craze leading companies like Microsoft to eagerly lock in the future 20 years of energy production of an entire nuclear power plant for its AI datacenters.

Not long after, Amazon was rejected from securing a similar deal on the grounds that tech companies cannot be allowed to absorb all the nuclear power available:

We are on the cusp of a new phase in the energy transition, one that is characterized as much by soaring energy demand, due in large part to AI, as it is by rapid changes in the resource mix.

Co-location arrangements of the type presented here present an array of complicated, nuanced, and multifaceted issues, which collectively could have huge ramifications for both grid reliability and consumer costs.”

Democratic chair Willie Phillips

Another boost to nuclear energy is the emergence of new technology to make it a lot safer, especially:

Overall, China has been leading in this field, notably with the first 4th generation nuclear power plant launched in 2023. Western countries are now starting to pick up as well, as most likely to look at streamlining some regulations to bring the cost of new reactors down.

Another key factor in decreasing costs will be to build in series the new reactors, whether traditional design or SMRs, in order to achieve economy of scale instead of the one-of-a-kind designs that have been built so far.

Nuclear Trump Effect?

With Trump elected president for a second time, it makes sense to look back at his position on energy. On the one hand, strong support for fossil fuel extraction is to be expected.

“You are looking at, overall, a ‘drill baby drill’ philosophy. You are going to see offshore lease sales; you are going to pipelines move much quicker; you are going to see fracking on federal lands and a mindset that is focused on lowering energy costs for consumers,”

Dan Eberhart – CEO of Canary LLC, an oilfield services company.

However, it will also likely include nuclear energy. The overall goal is to get the cost of energy to go down. His own campaign emphasized its 1st term activity in favor of nuclear energy:

There is little reason to expect less about nuclear from a candidate who has been enthusiastically looking to reduce dependency on foreign powers, massive infrastructure spending, and a focus on re-industrialization.

So while Trump's election might be bad news for renewables, it could be a good one for the nuclear industry.

Cameco

Cameco is the world's second-largest uranium miner, with mines mainly producing in Canada. This puts it just behind Kazatomprom in Kazakhstan. Its main mines are Cigar Lake and McArthur River/Key Lake in the Province of Saskatchewan.

As a result, Cameco will be at the center of supplying the raw materials required by existing and future nuclear power plants.

Since 2022, Cameco