The US Senate Committee on Environment and Public Works has passed a bill that approves the establishment of a national uranium strategic reserve.
The new bill, which will almost certainly pass the whole US Senate because it has bipartisan support, excludes any Chinese or Russian company involvement in supplying uranium to the stockpile.
But Australia, which already supplies uranium to American utilities, will almost certainly benefit from the US move, both in terms of uranium sales and exploration efforts in US.
Outgoing US President Donald Trump earlier this year announced that the US would spend US$1.5 billion a year for 10 years to establish the reserve.
However, that sum has been reduced to US$150 million but will be used through to next September to initiate the reserve program and fund work on advanced reactor planning.
It now looks as if the uranium stockpile will be added to Mr Trump’s presidential legacy.
Australian companies with strategic metals projects, including uranium, will be hoping the new co-operation between America and this country to ensure control of those metals survives a changed administration.
The bipartisan agreement in the senate on uranium suggests it might.
The uranium reserve will support strategic US fuel cycle capabilities and provide critical assurance of the commodity’s availability in the event of a market disruption.
Mr Trump’s initial announcement rippled into the Australian market, with some juniors here subsequently picking up uranium projects in North America.
The Trump administration in Washington has been pushing to expand uranium production domestically in order to reduce, or even end, America’s dependence on imports.
Since the announcement of that policy, there has been an upsurge in interest in reviving old mines, many of which were closed 40 years ago as uranium prices collapsed.
Australian uranium stocks soar on senate move
Almost all the 40-odd uranium stocks listed on the ASX rose strongly in Monday morning trade (significantly on Pearl Harbor Day, a reminder of when the US last needed a strategic reserve 79 years ago).
Several scored double-digit percentage gains, with one of the better performers being Peninsula Energy (ASX: PEN), which was up 20% at one stage.
That company has the advanced Lance project in Wyoming which, it says, can be returned to production in just six months once a decision to mine has been made.
Lance is one of the biggest US uranium projects in size and scale, with a JORC resource of 53.6 million pounds (23,400 tonnes). The company is licenced to produce up to 3Mlbs per annum.
Other big movers which were up more than 10% in Monday morning trade included Alligator Energy (ASX: AGE) with its Northern Territory and recently acquired South Australian projects, and Bannerman Resources (ASX: BMN) with a project in Namibia.
Industry veteran and one of the few that have got into production Paladin Energy (ASX: PDN) also was on the move, while Vimy Resources (ASX: VMY) with its large resources at Mulga Rock in Western Australia was higher, too.
With its fully permitted Honeymoon project in South Australia Boss Energy (ASX: BOE) rode the positive wave, Deep Yellow (ASX: DYL), which is another Namibia play also rose and Marenica Energy (ASX: MEY) with projects in Namibia and Australia saw major gains.
US has dropped the ball on uranium
Earlier this year, the US Department of Energy announced the working group report, The Strategy to Restore American Nuclear Energy, included a series of sweeping recommendations for potential future action that span the nation’s executive, regulatory and legislative landscape.
The uranium reserve was seen as supporting strategic US fuel cycle capabilities and provide critical assurance of uranium availability in the event of a market disruption.
In 1980, US companies produced nearly 44Mlbs of uranium concentrate and provided most of the supplies purchased by nuclear power plants in the country.
By 2017 American miners produced 2.4Mlbs and supplied just 7% of the uranium bought by domestic plants. That has now dropped further.
Once uranium miners were receiving government incentives but in 1989 the US Commerce Department decided that Canada and Australia could provide uranium that was both of higher quality at lower prices than American operations.
By then, the US was importing nearly 15Mlbs a year and domestic output fell by about a third to roughly 13Mlbs.
Australian juniors join the rush
Several companies are either in the process of acquiring North American projects or already at work.
Superior Lake Resources (ASX: SUP), a company named after its zinc project in Ontario, reported a month ago that it has extended its exclusivity option over uranium projects in Wyoming and Utah.
Another recent arrival is tungsten player Thor Mining (ASX: THR) which is diversifying into North American uranium and vanadium after taking an option over properties in Utah and Colorado.
These include 199 contiguous claims in the Uravan mineral belt in south-western Colorado and 100 claims in south-eastern Utah, 40km from the town of Moab, once known as “the uranium capital of the world” after a huge 1952 discovery nearby.
Thor has already begun field work and drilling is planned after the North American winter.
One of the early movers in the US uranium space was GTI Resources (ASX: GTR).
In April it was readying begin a new exploration program at its Jeffrey uranium project in Utah, located in a once busy uranium mining province.
However, it has since acquired gold interests in Western Australia and carrying out work there while maintaining its US arm.
In late October the company reported that it had completed the acquisition of two past producing Utah mineral leases “highly prospective” or near surface uranium and vanadium mineralization.
These adjoin leases already controlled by the company.
GTI has begun field work ahead of selecting drill targets in Utah.
GTI shares rose up 15% in Monday trading.
The Senate passage may well see a revival of interest among other juniors for a piece of the US uranium action.