American Uranium Companies Could Benefit If President Moves to End Dependence On Foreign Uranium Imports; Decision Coming By July 15
The same national security rationale used by U.S. President Donald Trump to slap tariffs on steel and aluminum could be on the verge of being used to protect domestic uranium producers in the United States.
According to the U.S. Energy Information Administration (EIA), the U.S. imports most of the uranium it uses as fuel for nuclear power reactors. In 2017 the EIA reported 93% of the uranium used was from foreign sources. The figure could be even higher this year, according to Uranium Energy Corp CEO Amir Adnani. The EIA will officially release figures later this month.
Speaking at Mauldin Economics’ Strategic Investment Conference earlier this week in Dallas, Adnani said, “On April 15th the Department of Commerce made a recommendation to the President about how to solve this 99.99 percent dependency on uranium imports…and the ultimate decision legally has to be made by mid-July.”
Section 232 of the Trade Expansion Act allows the President to impose tariffs on a recommendation from the U.S. Secretary of Commerce if “an article is being imported into the United States in such quantities or under such circumstances as to threaten or impair the national security.” Nuclear power accounts for roughly 20 percent of America's total electric energy generation.
Adnani believes the President’s decision could significantly impact the fortunes of U.S. domestic uranium firms.
“If the President enacts favorable policy, like quotas, to reserve a certain percentage of the U.S.-demand for U.S. production,” stated Adnani, “this could be a game changer for companies that can mine uranium from U.S. soil and bring it online quickly.”
The largest U.S.-based uranium companies that could benefit if President Trump moves to protect U.S. production are Adnani’s Uranium Energy Corp (NYSEAMERICAN: UEC), Cameco (TSE: CCO) and Uranium One, an indirect subsidiary of the Russian state-owned nuclear corporation, Rosatom.
A decision from the White House must be made by July 15.
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Disclosure: The author has a position in several uranium companies, including Uranium Energy Corp.