Uranium Week: Dual Role For Nuclear Reactors?

This story features BOSS ENERGY LIMITED. For more info SHARE ANALYSIS: BOE

As the uranium spot price reaches a year high for 2021, the US Department of Energy explores the benefits of onsite hydrogen production at a nuclear facility. 

-Exelon Corporation’s grant to explore hydrogen production 
-Sprott Physical Uranium Trust buys 900,000lbs of uranium
-Uranium spot price rises by nearly 8% for the week

By Mark Woodruff

Nuclear reactors could be given a new lease of life by providing ideal conditions to produce green hydrogen on a large scale.

In potentially significant news last week, the US Department of Energy (DOE) is providing Exelon Generation a grant to explore the potential benefits of onsite hydrogen production at its Nine Mile Point nuclear station in New York State. The DOE is looking at ways to develop new technologies through its H2@Scale initiative to efficiently scale-up the production of hydrogen.

Nuclear is considered to have the most economic hydrogen prospects of the green approaches, including wind and solar, that can provide the electrical power needed to drive the reaction that separates hydrogen from water. 

Currently hydrogen is used for oil refining and ammonia production. However, there is a growing demand for it to be used in steel manufacturing, in transportation to power vehicles and a number of other applications.

Exelon noted “The project will generate an economical supply of hydrogen, a natural by product of nuclear energy, to be safely captured, stored, and potentially taken to market as a 100% carbon-free source of power for other purposes”.

This process would allow utilities to produce and sell hydrogen regionally as a commodity in addition to providing clean and reliable electricity to the grid. It would also help build an economic case to keep the nation’s at-risk reactors up and running.

Company news

ASX-listed Boss Energy ((BOE)) last week reported its shares were upgraded to the middle tier of the over-the-counter (OTC) market for US stocks.

This is due to growing international demand and the fact that over 20% of the company’s share capital is held by US-based investors.  Management noted the upgrade offers the opportunity to build visibility, expand liquidity and diversify its shareholder base in the US.

The company is looking to restart its flagship asset, the 100%-owned Honeymoon Uranium Project in South Australia.

Uranium pricing 

TradeTech's Weekly Spot Price Indicator is US$33.00/lb, up US$2.50 from last week. Since early March, the Indictor has increased 20%, which marks a year-high spot price for 2021. It has increased nearly 9% so far in 2021 and over 8% in the last week. 

The average weekly Spot Price Indicator in 2021 is US$30.57/lb, US$0.86 above the 2020 average.

The Sprott Physical Uranium Trust used some of the proceeds of its recent at-the-market (ATM) fundraising to purchase 900,000lbs of uranium, comprising the majority of the weekly spot volume of 1.5mlbs.

Meanwhile, Denison Mines Corp and Uranium Royalty Corp announced they also intended to raise funds with ATM offerings, which appear likely to be used to make further physical purchases.

TradeTech's term price indicators are US$33.50/lb (mid) and US$35.00/lb (long).

Utility buyers in both the mid-and long-term markets are seeing lower offers than other buyers though TradeTech feels this may shift if the spot uranium price continues on its upward trajectory.

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