Uranium Radiates Investment Heat

Mineweb's Dorothy Kosich writes about the growing investor interest in uranium. In this excerpt, she cites a Dow Jones report that says private investors have recently purchased about 10 million pounds of uranium.

Amid all the hyperbole surrounding the soaring price of gold and other precious metals, uranium fever is also spreading among mining investors.

The push to revitalize nuclear power as a substitute for fossil fuels has gained momentum in this era of the Kyoto Treaty, reducing greenhouse gases, and high gasoline prices. Meanwhile, an estimated 103 U.S. nuclear power plants supply roughly 20% of the nation's energy.

. . . Dow Jones Newswires recently reported that nuclear industry analysts Ux Consulting estimated that about 10 million pounds of uranium has been purchased by private investors, equivalent to near 10% of the world's annual production. As of January 2, 2006, the weekly price of uranium was reported at $36.25/lb.

Financial players are now entering the uranium market, usually dominated by utility buyers and uranium producers. Canadian uranium miner Denison Mines manages the Uranium Participation Corporation (TSX:U), which went public in May, to invest in uranium in concentrates. As of November 30, 2005, Uranium Participation held 2.55 million pounds of uranium oxide in concentrates. The company's strategy is to buy and hold uranium concentrates, and "not to actively speculate on short-term prices."