Insights

Critical minerals are essential for the global energy transition as we gradually phase out CO2-intensive energy sources with cleaner sources, including nuclear, solar, wind, hydro and geothermal energy and greater use of electric vehicles (EVs). We believe the unique supply and demand dynamics for critical minerals will underpin potential investment opportunities in the years ahead.

Sprott CEO Whitney George discusses the global energy transition and the growing interest in critical minerals investing with Asset TV's Jonathan Forsgren. George explains how Sprott expanded beyond "all things gold" to offer physical uranium, as it forged a path to becoming a recognized asset manager in the energy transition space.

Sprott Asset Management’s Shree Kargutkar, CFA, speaks with Bloor Street Capital’s Jimmy Connor at the May 11 Virtual Copper Conference. Shree discussed the supply/demand scenario for the metal and how it may change with the growth of electric vehicles, geopolitical factors impacting global copper mining and recent M&A activity in the sector. He and outlined the potential investment opportunity copper and its miners provide. 

The long-term secular growth outlook for energy transition materials got several boosts in April, despite tepid performance for the month. Chile's decision to nationalize its lithium reserves reinforces the metal's role as a global strategic economic asset. M&A activity has heated up in the copper mining sector with lofty bids, including Glencore's $23 billion rejected offer for Teck Resources at a 20% premium.

Commodity prices weakened in March in reaction to financial system stress and recession fears. As deglobalization accelerates, unfettered access to critical minerals is not likely to last. The old system of free and fair access to commodities, including critical minerals, is moving toward one marked by interregional competition, and unstable availability and pricing. China has moved aggressively to acquire critical minerals in the past 20, but we believe the West has near-unmatched capabilities and is a formidable competitor.

February saw energy transition materials/critical minerals markets correct, but the secular story remains strong. As the global energy transition "arms race" heats up, the drive to secure supply is fast becoming more important than price. All signs indicate the 40-year bond bull market has likely ended and the next great secular bull market in commodities has begun.

Although markets in February saw a reversal of January's positive performance, spot uranium posted a slight gain of 0.20%, outperforming many other asset classes. Uranium miners made headlines with significantly-sized uranium contracts that reflect higher demand for long-term supply commitments. Uranium market fundamentals are the most positive in over a decade and are likely to continue to be the primary performance driver.

Whitney George, Sprott CEO: "In addition to our traditional precious metals focus, we have entered the energy transition materials space, which began with the creation of Sprott Physical Uranium Trust.... I believe Sprott is well equipped to offer  energy transition investments, which will be a very important theme in the next 10 years."

John Ciampaglia: “I think it's an interesting time to be investing in uranium — from a fundamental perspective, from an energy policy perspective, from a geopolitical risk perspective….we've experienced a sea change in the level of interest related to uranium, energy transition materials and mining investments.” Bloor Street Capital's Nuclear and Uranium Virtual Conference featured John Ciampaglia, CEO of Sprott Asset Management, and Per Jander, WMC Energy, Director, Nuclear & Renewables.

As the world sets aggressive goals to reduce reliance on fossil fuels and move to cleaner energy sources, critical minerals will be essential. Due to years of underinvestment, we believe demand is likely to outstrip supply for many energy transition materials, including uranium, lithium, copper, nickel and others. The investment opportunities may be powerful.

We believe we are in the early stages of an energy transition materials secular bull market and favorable supply-demand dynamics are likely going forward. The upward revision in global growth, the timing effect of the China credit impulse and the surprise ending of China's zero-COVID policy have provided a tailwind for the metals market. For energy transition metals, we see this as a cyclical boost on top of the robust secular demand that is in play.

Value Investor Insight interviewed Whitney George, John Ciampaglia, John Hathaway, Matthew Haynes and Per Jander on the key global macroeconomic shifts that have prompted Sprott to broaden and deepen its focus on real assets and energy transition investing. CEO Whitney George: "For the global energy transition, decarbonization initiatives will require an enormous amount of mined material. Chronic underinvestment in supply capacity and the difficulty in bringing mines to production indicate that supply is not likely to keep up with demand, putting upward pressure on prices for many energy transition materials."

January was a strong month for uranium markets, with U3O8 uranium spot price posting a 5.05% increase and uranium mining equities gaining 14.65%. Looking ahead, we believe the uranium bull market still has a long way to run. Over the long term, increased demand in the face of an uncertain uranium supply is likely to support a sustained bull market.

A global clean energy transition is underway. Significant investment in energy infrastructure will be required over the coming decades as we evolve how we generate, transmit and store energy. Critical minerals will be essential. We believe investing in the mining companies that produce critical minerals may offer attractive investment opportunities, as discussed in this video with Ed Coyne, Senior Managing Director at Sprott, and Steven Schoffstall, Director ETF Product Management.

Three key themes for uranium markets in 2023: 1) increased emphasis on energy security worldwide; 2) higher conversion/enrichment prices may boost spot uranium prices; and 3) the global energy transition supports the case for nuclear power. Uranium's performance was notably strong in 2022, despite the overall bear market. Although uranium mining equities fared less well, we believe that the positive fundamentals for uranium and nuclear energy are likely to provide support in 2023.

This year’s top 10 list offers Sprott’s thoughts on what will likely drive markets in the coming year and decade, from a macro perspective and the vantage of our asset classes: Precious Metals and Energy Transition Materials. We believe the global clean energy transition will grow more urgent as energy markets continue re-ordering and energy security becomes synonymous with national security. The signposts point to a commodity-intensive, inflationary and capital-intensive decade where energy transition materials and precious metals will become far more valued than in the prior market regime.

The uranium markets did not perform as well as other sectors in November, despite having posted relatively strong performance throughout 2022. While the price of U3O8 uranium has lagged since May 2022, conversion and enriched uranium prices have significantly appreciated. We believe that current demand, coupled with a shift away from Russian suppliers, is likely to support a higher U3O8 uranium spot price.

The U3O8 uranium spot price climbed 8.32% in October, rising from $48.25 to $52.27 per pound. YTD as of October 31, 2022, the uranium spot price has climbed by 24.12%. We believe the uranium bull market remains intact despite the negative macroeconomic environment. Our outlook is supported by the unprecedented number of announcements for nuclear power plant restarts, life extensions and new builds that are all creating demand for uranium.

September was tough on uranium (both physical and stocks), which was negatively impacted by the month's drawdowns. We believe the uranium bull market remains intact, especially given that many countries are facing energy shortages and rocketing costs. Nuclear energy provides a solution as a reliable, affordable baseload energy source. 

Uranium, both physical uranium and mining equities, had standout performance in August, in contrast to the weak results posted by the broader markets. We believe uranium's gains reflect the growing acceptance of nuclear power among global governments as they seek alternatives to meet ambitious energy transition and security goals.  

Energy infrastructure and commodity markets are coming into high focus. A new wave of technological changes geared towards higher energy efficiency is underway. We believe that nuclear energy and uranium miners are poised to benefit from this shift.

The Sprott Physical Uranium Trust (“SPUT”, TSX: U.U ($US); U.UN ($CA)) was launched just over a year ago in July 2021. While we were optimistic about the prospects for uranium, we could not foresee the tectonic shifts in the uranium sector that followed the launch and SPUT’s significant impact.

When SPUT began trading in late July 2021, there were many questions about how it would affect the uranium market. With 12 months of trading now behind us, we can confidently state that SPUT has dramatically altered the spot uranium market with far-reaching effects on much of the industry.

A new uranium bull market is underway. Uranium miners are well positioned to take share within the energy sector as energy security and decarbonization take center stage globally. A uranium supply deficit is looming on the horizon, and uranium miners are likely to be the beneficiaries of increased investment. Learn more from our webcast replay.

A new uranium bull market is underway. Energy security and decarbonization are taking center stage globally, igniting a fresh and more rational look at the benefits of nuclear power. Ed Coyne, Senior Managing Director at Sprott, joins Tim Rotolo, co-creator of the North Shore Global Uranium Mining Index (URNMX), to explain how the Index is constructed to provide exposure to the key components of the uranium mining industry.

Host Ed Coyne is joined by Tim Rotolo, co-creator of the North Shore Global Uranium Mining Index (URNMX), to discuss the current dynamics of the uranium mining sector and how the Index is constructed to provide exposure to the key components of the uranium mining industry.

Nuclear energy’s profile as a highly efficient, reliable and zero-carbon producing energy source has helped to create a new bull market for physical uranium. We discuss the shifting sentiment toward nuclear power and why a growing number of investors are investing in physical uranium and uranium miners.

Research and development on small modular nuclear reactors (SMRs) are underway globally and generating tremendous buzz. But SMRs are not likely to contribute meaningful amounts of carbon-free power for another decade. By contrast, nuclear power plant life extensions and uprates hold the power to boost carbon-free electricity production in the interim and provide a bridge to a future date when new SMR technologies will be commercially available.

Nuclear power generates more than 50% of the carbon-free electricity in the U.S. while meeting 20% of the country's electricity demand. As the country and the world take steps to tackle greenhouse gas emissions, we believe that uranium and nuclear power will be critical to the solution.

John Ciampaglia, CEO of Sprott Asset Management, chats with New York Times’ best selling author and founder of The Bear Traps Report Larry McDonald, laying out a compelling thesis on why uranium is a vital component for the energy needs of the world. Despite supply-side difficulties with uranium mining, Ciampaglia explains how a growing uranium market can give mines the resources they need to increase mining operations and power the planet.

Uranium, an element born of the stars, is as complex as it is paradoxical. This heavy metal holds dormant powers both inspiring and terrifying. This new video shares incredible facts about uranium’s inter-planetary origins and looks at the critical role of uranium in the burgeoning green energy economy.

Uranium spot prices have been rising in 2021, in what we see as a strong new bull market. Investors are betting on nuclear energy’s profile as a highly efficient, reliable and clean energy source. Aggressive decarbonization goals worldwide are driving major policy shifts that are likely to bolster demand for uranium and nuclear energy.

David Lin of Kitco News interviews John Ciampaglia, CEO of Sprott Asset Management. They explore the recent surge in uranium prices, supported by a growing understanding that nuclear power is perhaps one of the more reliable and safe sources of baseload power and uranium supply is limited.