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In this episode of Wealthion, host James Connor and guest John Ciampaglia, CEO of Sprott Asset Management, dive deep into the compelling world of uranium investment, against a backdrop of escalating global demand and geopolitical tensions. Uncover the dynamics behind uranium’s impressive performance and how the shifting energy landscape could shape your investment strategy. From the supply deficit challenges to nuclear power’s pivotal role in a greener future, get expert insights on harnessing the potential of this critical resource for wealth growth and protection.


James Connor 0:05
Hi and welcome to Wealthion. I’m James Connor. My guest today is John Ciampaglia. John is the CEO of Sprott Asset Management, and Sprott is an asset manager based in Toronto, and manages over $25 billion in assets, most of which is allocated toward resources. One of the resources we are discussing today is uranium and uranium is the fuel used to power nuclear reactors. Uranium was one of the best performing commodities in 2023, up over 80%. But it’s been pulling back here in early 2024. And we’re going to get John’s views as to why it’s pulling back and also where the price is going in the longer term. John, thank you very much for joining us today. How are things in Toronto?

John Ciampaglia 0:44
Hey, great to be back. Toronto is a little chilly after a little hint of spring last week. So we hope spring returns.

James Connor 0:51
John, uranium has been one of the best performing commodities in recent years. And I want to get a better understanding as to why and I want to begin with a macro backdrop, what’s been driving the demand for uranium here the last few years?

John Ciampaglia 1:04
Well, I would say the biggest driver has been the fact that we have a structural supply deficit, that basically means that the world each year consumes more uranium that we then we actually produce from the ground. And just to give you some, some some perspective on that, this year, we might produce let’s say, 145 million pounds of uranium. So that’s primarily what they call primary production, the 430 Odd nuclear reactors around the world consume about 180 million pounds. So the industry is basically living on borrowed time, so to speak, by not producing what it consumes each year. And you can do that for a period of time. Because you have inventories, you have different stockpiles that can be available to you. But at some point, you run those down and you run the risk of running out of uranium. And, you know, with all commodity markets, when a market starts to get into a deficit position, you ultimately need to stimulate more production. And that is obviously accomplished by pyre incentive pricing to, to finance and support the development of new uranium production. And that’s basically been happening. The last two or three years, the price of uranium has gone for about $30. And right now we’re trading around the mid 80s per pound. So it’s, it’s doing its thing the market is responding as you would expect, the price is moving to a point that has allowed many previous producing mines to come back online after five 610 or even 15 year periods of time where they were basically placed on care and maintenance when prices just were not economic. So we’re getting we’re getting a supply response. But really, at the end of the day, what’s what’s driving the demand? Well, the world is shifting back to nuclear power. The US alone has pledged to triple its nuclear capacity over over the coming two decades. So it’s a pretty tall order and challenge. And it’s not just the United States, it’s happening in Canada, where I live, it’s happening France, the United Kingdom, Japan, South Korea, a number of countries, obviously, in Asia, China’s leading the way with over 100 new builds planned. India’s another big another country that’s going to be building quite a bit of nuclear power.

James Connor 3:33
It’s so what are we just talking about the number of nuclear reactors you talk about China and in how they are undertaking a massive build out. But maybe, can you tell us how many nuclear reactors are currently in operation throughout the world, and how many are being built.

John Ciampaglia 3:48
Now there’s about 434 reactors around the world. The United States has the largest fleet with 92 of them. And it is projected by the end of this decade. So by 2030, it is believed that China will will become the largest the largest user of nuclear power in the world. And that’s because they are building somewhere in the neighborhood of five to six new reactors every year. So why are they doing this? Well, nuclear power provides very reliable 24/7 power, which we call baseload power. Once you start the chain reaction that goes continuously, it is helping them to decarbonize their economy and their grid. China historically has been very dependent on very cheap coal to generate electricity, which obviously produces a lot of pollution. So they are trying to manage the pollution. They want reliable energy and the technology that they’re that they’re using in China is a homegrown, a byproduct. So these nuclear power stations that they’re building in China are actually China design In China built and there’s no doubt in our minds that they are going to be the number one country in just a few short years.

James Connor 5:08
And I believe I read China receives 60% of its energy from the burning of coal. Does that sound correct?

John Ciampaglia 5:16
Yeah, that’s about right. I mean, it was as high as about 75%. A number of years ago, China right now is deploying not just nuclear power, capacity in record amounts, it’s also building out huge amounts of solar generation. By far, again, they’re leading in another category, not only are they building the most nuclear power stations in the world, they’re also deploying the most amount of solar. And that’s just because the price of solar panels has become incredibly inexpensive. And there are vast areas of China that are lightly populated, believe it or not, that they can they can build these massive solar farms and then and then transmit the power over much larger distances to urban centers. And then and again, China seems to be leading in all kinds of things in the world right now.

James Connor 6:08
Yes, they certainly are. So you made mention of the fact that they have this massive build out happening within nuclear reactors? Do they produce any uranium? Or do they have to import it from other countries?

John Ciampaglia 6:19
Yeah, China is very clever in terms of their supply chain management and the way they build out their supply chains. You’re not going to build multibillion dollar machines, which are basically nuclear power stations, without ensuring you’ve got security supply for the fuel, which is uranium. So China today, owns and operates a number of mines in Africa. So that is that provides them direct access to rhenium. They also have some jayvees, around the world. And then finally, they purchase an enormous amount of uranium from Kazakhstan. And why Kazakhstan is important is because it’s their neighbor. So it’s right next door. But Kazakhstan is the largest producer of uranium in the world, about 44% of all the world’s uranium comes from one country. We believe over half of the Kazakh production goes to China, China is building a huge inventory of uranium, before it builds out all of these reactors, so it has absolute security supply related to the fuel.

James Connor 7:21
So you mentioned that, because the country of Kazakhstan is the world’s largest producer, who would be the other. If we were looking at the top three, who would the other two be?

John Ciampaglia 7:32
Yeah, so Canada’s a very meaningful producer, Australia is Pakistan, another neighbor of Kazakhstan, iniziare, and Namibia and a round out the key producers in the world. Right now the world is very focused on diversifying its sources of supply for uranium because of geopolitical tensions, which we all know about. And there is a real big push right now to restart more US domestic production, which has largely gone offline. And just to give your audience some perspective, you know, the early 1980s, the United States mined domestically about 40 million pounds of uranium. And that was largely to fuel its its fleet of nuclear reactors. Last year, it produced approximately 300,000 pounds. And just to put that into perspective, the US nuclear fuel fleet requires about 50 million pounds of uranium every year. So the US is completely dependent on other countries for its sources of uranium.

James Connor 8:38
Yeah, that’s a great overview. So let’s just recap a little bit. So. So global demand for uranium is 180 million pounds. We’re only producing did you say 135 million pounds?

John Ciampaglia 8:53
Expectations this year are about 145.

James Connor 8:56
And the US is the world’s largest consumer Consuming approximately 50 million pounds they produce next to nothing. So there’s a lot of risk to the US on on securing this uranium.

John Ciampaglia 9:09
It has not gone unnoticed. And I think there are a couple of things happening right now to encourage, incentivize and stimulate the production of uranium on US soil. Again, we’re seeing a whole host of different mines in the United States, in Utah, Wyoming, Texas, Arizona, potentially getting back to production this year. And next, so that’s a very positive, I think developments. And then if you want to delve into the nuclear fuel supply chain, US utilities today rely on Russia for about 25% of its requirements related to enriched uranium. And the Department of Energy is very concerned about this and is incentivizing the expansion of US domestic capacity to enrich uranium. And that is happening right now there are a number of facilities in the United States that are in, in, in the process of expanding to basically wean off of the United States. There is a bill that is working its way through the legislative process, the United States that will ban the importation of Russian uranium at the end of 2027. It’s it’s stalled through that legislative process. But I think most industry constituents believe it’s just a matter of when it gets passed, not yet at this point.

James Connor 10:36
But as it stands, stands right now, the US is dependent on Russia for some of its nuclear energy services.

John Ciampaglia 10:44
That’s correct. Since the war broke out, two years ago, utilities have continued to take delivery from Russian suppliers, but they have not signed new contracts. So what they are doing is continuing to take deliveries under contracts that were signed prior to February 2022. They’re clearly not signing new ones because the government is clearly signaled to the industry that it no longer wants to be dependent on Russia, given Russia could decide to weaponize uranium and hold the US hostage.

James Connor 11:18
You made mention of the fact that the country of Kazakhstan is the world’s largest producer, a company within that country called kazatomprom produces approximately 25% of the world’s uranium, they’ve had numerous production problems, maybe you can just touch on that and what that’s been doing to the uranium price.

John Ciampaglia 11:36
Yeah, so in the commodity world, we pay a lot of attention to the price because the price is obviously the key determinant to determine whether a mine or a deposit of war is economically viable or not. And so you know, basic supply and demand fundamentals as the price of a commodity goes up, you would expect that participants would try to take advantage of the higher pricing by expanding production, whether that’s bringing a new mine to market or expanding an existing one. And with the price of uranium going from 30 odd dollars a pound to the mid 80s. Right now, you would expect there is a very strong incentive to bring new production online. And as I mentioned, there are a number of us mines and Canadian mines and mines in Africa and Australia that are restarting as we speak. But the big question everyone’s been focused on is Kazakhstan, because it is the largest producer in the world. It’s also one of the lowest cost producers in the world. So they would have a very large incentive to flex production up to take advantage of this shift back to nuclear energy. And to capitalize on the supply deficit. In the last few months. They’ve sent some very important signals to the uranium market. At the end of September last year, they told the market, they were planning to increase production by 8 million pounds in 2024. Well, just a few weeks ago, they basically walked that back and said, due to sulphuric acid shortages in the country, which is a key chemical that they need in their mining process, they will not be able to flex the production up by 8 million pounds. And they’re no longer providing guidance with respect to what production is going to look like for 2025. We’re going to get that later in the year. So what ultimately kills a bull market in a commodity is basically a supply response. And so when the largest lowest cost producer in the world, signals that they are having production challenges to flex production, it basically signals to us that this bull market will last for longer, because we’re just not getting that immediate supply response anytime in the next few years.

James Connor 13:48
And we’ve also had production issues coming out of Cameco, which is the world’s second largest producer, maybe you can just touch on some of their issues.

John Ciampaglia 13:56
Yeah, I think this is really a function of an industry that was basically shut in for a very long period of time, for basically 10 years, the price of uranium was at a very low level, that did not make a lot of economic sense to keep a many operations going. And so when you close these operations down, whether it’s a mine or a mill, you know, there’s atrophy, there’s atrophy in the in the supply chain, you lose your knowledge workers, your your skilled workers, and then when an industry tries to resuscitate itself and come back and expand production, you know, you find that many of your workers are gone, they retired, they moved to other industries, and there are hiccups in terms of trying to start new mines and mills and old equipment, etc. So I think that’s that’s important because again, supply response and rising commodity market is very important to watch. And when the two largest producers in the world are signaling that they’re having challenges, I think It speaks to the fact that, you know, we’re this bull market is still has quite a bit of room to run in our, in our opinion.

James Connor 15:09
uranium was trading at approximately $50 A pound just last August and it ran up to $105 a pound by January. And now it’s pulled back to the mid 80s. And we just talked about the production problems that the two the world’s two largest producers are having because that of raw mechanical, and intuitively, I would think that would be bullish for the price of uranium. Why has the price pulled back as much as it has?

John Ciampaglia 15:36
Yeah, well we view this as a pretty natural and healthy correction or positive bull market. I think when you look at historical commodity bull markets, even though commodity might go up five, or six or seven or eight times, there are many little mini corrections along the way. And I think we just experienced one, just as you mentioned, for context, the price of uranium at the beginning of 2023 was $48 a pound, we got to kind of the high 50s in the summer. And then we went on a really strong run where we went from, you know, $58, up to 106, we’ve pulled back about $20 a pound. I think the market clearly got ahead of itself a little bit and people took some profits. We also sense that buyers of uranium also got cold feet, and instead of chasing the price ever higher have stepped away from the market, allowing it to kind of cool down because the price did rise very quickly over the last three or four months. The market seems to have found some footing price has kind of gone up a few dollars in the last few days. We think it’s it’s it’s kind of it’s done its correction and we think it’s set up well to get to the next step.

James Connor 16:51
So that’s a good overview of the supply demand side. Now if an investor wants to invest in physical uranium, how can they do that?

John Ciampaglia 17:00
Yeah, so when we talk to investors about how do they participate in this investment thesis, there’s there’s really two tracks to think about. There’s ways to invest in physical uranium, believe it or not, Sprott has a vehicle there are other vehicles in the market that simply hold uranium at the conversion facilities that are located in Canada, the United States and France. So the Sprott physical uranium Trust, which trades on the Toronto Stock Exchange and it also trades on the OTC market in the United States gives you exposure to the spot you’re at market essentially, the fund is about 5 billion US dollars, and it’s currently sits on inventory of just under 64 million pounds of uranium. The the other way to invest in the sector is through the producers, the companies that are currently producing uranium companies that are developing new mines and companies that are restarting old mines. And Sprott has two vehicles listed in United States that invest in either the broad spectrum of uranium mining so everything from the largest producers down to exploration companies, that’s called the Sprott uranium miners ETF and we also have a junior version of that fund, which basically lops off the two largest producers as well as the exposure that we have in the other fund to physical uranium. The Sprott uranium miners has about an 18% allocation to physical uranium through two different vehicles. And the junior fund does not have that exposure. So obviously, they’re talking about smaller cap companies and the junior fund less liquid, so they are more volatile. So they all have their different risk return attributes and exposures to the sector. But they all three vehicles have been very popular with investors over the last couple of years.

James Connor 18:56
And you speak to investors continuously through your day. retail and institutional investors. Where’s the most interest coming from for this trade? Would it be in North America, Europe, Asia?

John Ciampaglia 19:09
it is really global. We talk to investors right around the world, it’s never ceases to amaze us where the pockets of interests come. Very popular United States law, I would say the United Kingdom is a very big market for us, Brazil, Australia, Singapore, Hong Kong, Canada’s kind of, you know, surprisingly, a little bit behind the curve. We continue to do a lot of education with institutional investors here. But it is really global. And I think it’s global because energy markets are global. And people that are studying energy markets have to have a global perspective. And I think the signals that investors are hearing have been incredibly consistent and strong, whether it’s, you know, messages coming from the Department of Energy or the Biden administration. or different governments around the world that are signaling a very clear shift back to nuclear energy to achieve decarbonization, goals, national security, you know, energy security goals. And then I think the last factor is just the growing, growing need for more electricity. So if you think about the growing need for electricity is predominantly coming from emerging markets, countries that consume much lower amounts of energy than you and I do in our day to day lives, think about places like India, and Africa. But in the developed world, we’re starting to see growing expectation expectations for higher electricity requirements. And just to put it in the context in the US, for example, total electricity demand over the last 15 years has been completely flat. And the reason for that is because of energy efficiency, we just don’t need as much, you know, we have we consume very high levels of energy to begin with, we focus on energy efficiency, and as a result, our electricity consumption in United States has been completely flat over the next, say, five to 10 years, many utilities are starting to signal that they’re their their customers are going to be requiring much more electricity. So it’s not you or I directly using more electricity. It’s things like data centers, its data centers for artificial intelligence servers, these are very energy intense. And guess what these data centers need 24/7 reliable power. Now, where does that come from, comes from nuclear energy. So we just in the last few few weeks, saw Amazon, their their cloud service company, actually by a data center that’s co located next to a nuclear power station. So it has completely reliable 24/7 365 energy. And I think if you look at what Microsoft and companies like Google are saying, they are writing white papers right now about how their data center needs in the coming years, the best way to fulfill the electricity needs for those data centers and AI is going to be through nuclear energy. And I think this is a really interesting use case, that is just starting to be understood, let alone some of the other use cases like hydrogen production, industrial heat production that nuclear energy is trying to achieve. So we still we still think there’s an emerging use case, a number of emerging use cases for nuclear energy that the market is just starting to understand.

James Connor 22:38
Well, that’s fascinating. I didn’t realize that there was this association with AI and the need for all this additional power. It would be fascinating to see somebody like Microsoft or Amazon construct their own nuclear reactor.

John Ciampaglia 22:52
Well, it’s funny you say that, because there is a company called Terra power, which has been funded by Bill Gates constantly. That is developing a small modular reactor, which would be like a small scale nuclear power station. And I think it’s very much intended to meet the needs of things like data centers that obviously don’t always need a very large scale scale power station. But absolutely, could you utilize the versatility of a smaller scale nuclear power station.

James Connor 23:21
So you touched on this earlier, but you were talking about baseload energy, and how nuclear energy can run 24/7 without any interruptions, and we’re hearing a lot about solar energy and also wind? Maybe you can just talk about those in relation to nuclear energy? And what are the disadvantages associated with those two types of energy?

John Ciampaglia 23:43
Sure. So the world is deploying record amounts of solar solar energy right now, China, as I mentioned, is the leader there. And the reason they’re deploying it is it’s really cheap. The panel’s come down in price every single year by 10, to 12%. So you can scale it up enormously. If you’ve got the land, assuming you do, the challenge is your capacity factor. So that’s the amount of time during a full, you know, 24 hour cycle, how much power you can generate for solar is about 20 to 25% of the time, obviously, is impacted by night and clouds and whatnot. You can obviously run a data center that needs 24/7 reliable power when your solar plant is operating at 20 25% of the time. Now, one of the ways to mitigate against that challenge is obviously to build large scale batteries that store the power during the day and drop it off during the night. That is slowly happening. But the batteries are just still very expensive, and they are not being able to deploy them at really large scale. So for example, if you wanted to build a solar farm and back it up with large scale batteries, how much battery runtime would would, would you be able to put into place we’re not talking about You know, having batteries that run for eight or nine hours, it could be batteries that run for maybe two hours or three hours. So we’re not quite there yet in terms of the cost and scale, but everybody’s working on this. And this is why nuclear energy is the perfect complement to renewables that are basically running at a 25% capacity. If you want to talk about winds, which is also being built out in different parts of the world, your capacity factors there, depending on how windy it is, can be 35. offshore winds can be up to 45% of the time, again, you need to have a backup power source to offset intermittency. And that really comes down to just a few options, which are coal, which people obviously try and move away from natural gas, which is obviously one of the most popular forms of backup, and then nuclear power.

James Connor 25:53
So just to summarize, nuclear runs 24/7, whereas the sun doesn’t always shine, the wind doesn’t always blow. So those aren’t always reliable sources of energy.

John Ciampaglia 26:04
Yeah, exactly. And I think the other point I would add, is that a nuclear power plant, once you load the fuel on the core runs for 1824 months continuously until you need to refuel or maintain. So not only does it run 24/7, it runs for 18 to 24 months continuously. If you contrast that to say a natural gas plant, obviously, you need to secure your supply of natural gas each and every day. Now the plant may be peaking up and down as a solar power and wind power are going up and down as well. But you need to ensure a daily supply of natural gas to keep that plant running, which, you know, the Europeans learned the hard way two years ago when the Nord Stream pipeline got sabotaged.

James Connor 26:50
So John, let’s just summarize everything we talked about. And to me when I look at this trade, it sounds very bullish the demand side it’s we’re currently producing or consuming 180 million pounds a year, that’s only going to go up significantly, especially when China continues on with this massive build out their their consumption of uranium is just gonna go through the roof. And then when you add in the geopolitical situation, given the the fact that so much uranium is coming out of Kazakh, Kazakhstan, and a lot of these other countries that might be considered unfriendly. It sounds to me like the price of uranium can only go one way, and that’s significantly higher.

John Ciampaglia 27:30
Yeah, I mean, if you look at the previous two bull markets in uranium, one happened in the 1970s. And that was in direct response to the OPEC oil crisis. And the price of uranium went up significantly over that period of time, because that’s when the world started to shift the nuclear power for the very first time. The second bull market was in the 2000s, which was part of the commodity supercycle China signaled to the world that was going to start building nuclear energy capacity for the first time, and the price of uranium went up exponentially during that period of time. Now, if you look at those last two cycles, and you put it in today’s dollar terms, using an inflation adjusted price, in the 1970s, the price got to about $170 a pound. In 2007, the price got to about $200 a pound. And in today’s dollars, obviously the price of uranium, the spot market is trading around $85. So even though the price of uranium has gone from 30 to 85, when you think about where it got two in the last two bull markets adjusted for inflation, we still think there’s there’s still opportunity for the price to go up meaningfully more.

James Connor 28:45
Well, great story. Join as we wrap up if someone would like to learn more about Sprott and the various products that it offers, where can they go?

John Ciampaglia 28:54
Yeah, we would encourage investors to come to, we’ve got a really great education center there, and an Insights page, which provides all kinds of monthly reports on uranium, as well as a number of podcasts on uranium with industry leading experts. And it’s really the first step to educate yourself about the sector to understand exactly what it is all about. So you can make an informed and confident decision if you if you move forward.

James Connor 29:23
Well, that was a great discussion. I want to thank you very much for spending time with us today. And I look forward to our next discussion.

John Ciampaglia 29:29
Thank you very much. It was great to chat.

James Connor 29:31
Well I hope you enjoyed that discussion with John Ciampaglia. One of the reasons why we do these interviews with people like John is to provide you with insights on possible assets to invest in. There are numerous asset classes in which to invest but what assets are right for you and your risk profile? To help answer these questions. Consider having a discussion with a Wealthion endorsed financial advisor at There’s no obligation to work with any of these advisors. It’s simply a free service that will be on offense. For all of its viewers, once again, don’t forget to subscribe to our channel and hit that notification button to be kept up to date on future events. Thank you again for spending time with us today and I look forward to seeing you again soon.


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