Nuclear power has not only been controversial since yesterday. Nevertheless, there are still extensive plans to build new nuclear power plants. Nuclear power is still in demand, especially in Asia. But more than 30 new nuclear power plants are also being planned in Europe.
The raw material required for this purpose is still needed with an upward trend. At the same time, uranium deposits are limited. So are uranium shares really a worthwhile investment?
Good reasons for uranium shares
Even though nuclear energy has been controversial since the beginning, there are both negative and positive arguments for or against nuclear power. There is no doubt that nuclear energy is extremely dangerous for people and the environment due to radioactive radiation.
On the other hand, nuclear power can reduce the consumption of fossil fuels enormously and that is exactly why nuclear power can still contribute decisively to achieving the climate targets worldwide.
In 2019, about 54000 tons of uranium, the raw material necessary for nuclear power, were extracted. According to estimates by the International Atomic Energy Agency (IAEA), about 108000 tons of uranium will be needed in 2030.
At the same time, the world’s uranium supply is limited. Experts estimate that uranium deposits will only last for a good 20 years based on current uranium demand. If nuclear power remains an important pillar in electricity generation, however, the demand for uranium will increase enormously, because electricity demand will rise enormously in the future, not least as a result of increasing electromobility.
Unlike many industries and many commodities, there are quite few big players in the uranium business whose shares can be described as pure uranium shares. Overall, this ensures quite stable price developments for all uranium shares.
Problematic from an ethical point of view
There may be other good reasons to consider uranium shares as an investment. But from an ethical point of view, investing in uranium shares is problematic.
Any investment strategy should possibly not be determined exclusively by economic aspects. Each investor must also decide for themselves whether an investment in a particular industry or commodity is ethical.
Uranium is clearly one of the investment areas that many people avoid for moral or ethical reasons, despite the good potential returns. Uranium shares are just as controversial as investments in the arms industry or tobacco and cannabis shares.
However, anyone who considers investment in uranium shares to be justifiable from a moral and ethical point of view has a good chance of a return, at least at present.
Even though experts agree that uranium will become more important for energy production in the near future, this does not necessarily mean that uranium is a raw material of the future.
Some believe that all uranium reserves will soon be exhausted, while others are betting that earlier forecasts of the actual uranium supply were incorrect and that this time, too, the uranium supply is being misjudged.