While the stock market is concerned with rising and falling oil and gas prices, I am concerned about australian uranium stocks, primarily based in uranium-rich Australia. I posted about a great uranium stock newsletter sometime ago, which really opened my eyes to the riches in Uranium stocks. Basically, as the US government and various organizations push towards clean energy initiatives, more people will rely on ethanol, uranium, and other substitutes for oil and gas.
Uranium Dominance in Australia
When looking for clean energy alternatives, like Uranium, Australia is the first place investors should research. Take a look at these statistics on Australia’s world uranium dominance:
- Uranium is part of Australia’s mining heritage, though only three mines are currently operating. Two more are proposed.
- Australia’s uranium reserves are the world’s largest, with 24% of the total. Production and exports exceed 11,000 tonnes of uranium oxide (9300 tU) per year.
- Australia’s uranium is used solely for electricity. It is supplied under arrangements which ensure that none finds its way into nuclear weapons.
- In the five years to mid 2005 Australia exported 46,600 tonnes of uranium oxide concentrate (39,500 tU) with a value of over A$2.1 billion to eleven countries around the world.
(Source: Australia’s Uranium and Who Buys it, 2006)
Australian Uranium Stock Plays
Representing nearly 1/4 of the world’s uranium reserves, Australian uranium stocks are sure to take off in the next 10 years. Of the many uranium miners in Australia, I believe only the biggest miners will land the most profitable contracts. Here’s a list of three Australian uranium mining companies to keep on the radar:
- BHP Billiton (BHP) – Owner’s of the world’s largest uranium deposit. This is my favorite of the uranium stock plays. Don’t forget that BHP landed the multi-billion dollar contract with China to supply them with uranium for their nuclear energy plants.
- Energy Resources of Australia Limited (ASX:ERA) – shares trade on the Australian stock exchange. Visit the ERA website for more information.
- Rio Tinto plc (RTP) – Rio recently appointed a CEO, so we should consider following this stock before buying in. Another good sign: retained earnings have doubled in Q2 2006 to $12 billion from $6 in Q2 2004. Well done, RTP.
My Uranium Stock Pick: BHP
My Overall Australian Stock Pick: I still like BHP because of their uranium contract with China. BHP shares are trading at 11 times earnings, maybe signaling a possible buy opportunity.
Uranium stocks won’t take off for a couple of years until the reality of depleting oil resources kicks in. If we hold uranium stocks before the rest of the market realizes their value, we’ll make some nice stock gains.
While his background is mostly related to trading stocks, he recently gained interest in real estate crowdfunding with Fundrise.