Uranium Bull Case Strengthens As Japan Calls Nuclear “Key” To Its Decarbonization Goals
Submitted by Quoth the Raven at QTR’s Fringe Finance,
Days after the U.K. said that nuclear would be “at the heart” of its decarbonization strategy, Japan has now called nuclear reactor restarts “key” to achieving its own green energy goals. This marks a far quicker global adoption of nuclear during the ESG age than I had anticipated and, in my opinion, will likely bode well for my long-term uranium bull case.
Last Friday, Japan adopted a new energy policy that went little noticed by those participating in the uranium market.
The plan seeks to bring the country to carbon neutrality by 2050, according to AP.
And while this plan is mostly in line with what many other countries are implementing, the proverbial angel for uranium investors may be in the details.
“Japan has been undecided over what to do about its nuclear power industry since the 2011 Fukushima plant disaster. It now says reactor restarts are key to meeting emissions targets as Japan tries to step up in the global effort against climate change,” the AP report reads.
Fumio Kishida, who is replacing Prime Minister Yoshihide Suga, is officially “a backer of nuclear plant restarts”, the report notes.
As you can see by the below chart, the country’s operable nuclear power capacity has dwindled in the years following the 2011 incident, after rising steadily in the 4 decades prior.
As common sense slowly starts to win the day in counties like Japan, I am expecting this capacity to once again rise to, and past, all time highs.
I had pointed out a couple weeks ago a wonderful piece by Zerohedge that said Suga’s replacement would likely back nuclear.
The AP report continued:
The plan keeps the target for nuclear power unchanged at 20-22%. Japan says it aims to reduce its reliance on nuclear power as much as possible but that nuclear will remain an important energy source. Experts say a phase out is unlikely anytime soon.
Economy and industry minister Koichi Hagiuda has said “drastic energy conservation, maximum promotion of renewables and safe restarts of nuclear reactors” are key.
Japan will continue its nuclear fuel reprocessing cycle, in which spent nuclear fuel is converted to plutonium, despite the failure of its Monju plutonium-burning reactor and international concerns over safeguards for its plutonium stockpile.
A government taskforce will “accelerate” restarts of reactors, which have been slowed by stricter safety standards set after the Fukushima meltdowns, the plan says.
And while new reactors don’t seem to be on the agenda just yet, common sense says they will be, in time. Japan, like France, is also looking at developing small modular reactors for power.
Remember, just days ago I noted that a second large uranium trust – in addition to Sprott’s already active trust – could soon be a buyer in the uranium spot market. I also noted that China could be in the midst of adoption nuclear, a path I thought would make tons of sense for the country. I explained my reasoning in this article:
Days prior to that, I wrote about how widespread coming adoption of nuclear as an ESG solution – especially in places like the U.K. – could be a serious catalyst that keeps uranium prices moving higher.
With Japan now seriously throwing its hat in the ring, I continue to expect long-term tailwinds for uranium heading into 2022 and plan to remain long the commodity.
As a wonderful supplement, the World Nuclear Association has prepared a massive and comprehensive report on the state of the nuclear industry in Japan, which can be read here.
Remember that I laid out my case for why I was going long uranium in detail in a subscriber-only post that can be viewed here.
Zerohedge readers get 10% off an annual subscription to my blog by using this special link here.
DISCLAIMER: I own URA, URNM, CCJ and have tons of uranium stocks and options. None of this is a solicitation to buy or sell securities.
Fri, 10/29/2021 – 17:05