TORONTO (Kitco News) - The uranium market has been in a five-year bear market that shows no signs of bouncing back.
But, one junior uranium player says the commodity is set for a strong move up.
Kitco News caught up with Amir Adnani, CEO and president of Corpus Christi, Texas-based Uranium Energy (NYSE-MKT: UEC), on the sidelines of the world's largest mining conference, the Prospectors and Developers Conference (PDAC) in Toronto, which wrapped this week.
Spot prices of uranium, used to make fuel for nuclear power production, have been depressed since the 2011 Fukushima disaster in Japan, which led to the shutdown of the country's reactors and generated stockpiles globally.
However, Adnani said that demand is growing rapidly, with China, in particular, aggressively building reactors. "China is talking about increasing its nuclear capacity from 27 gigawatts to 160 gigawatts - which sets the tone for demand," he said.
"The spot price has pulled back over the past few weeks - I think we are set for strong price movement - I think we will see a strong year for uranium," Adnani added.
Prices of uranium have also remained suppressed in part becausee utilities are betting prices will remain low and are in no hurry to secure future supply. Adnani explained that with the recent COP21 conference in Paris, it is clear that uranium will play a key role in battling CO2 emissions.
Adnani was also at PDAC to speak about the company's latest $10.5 million financing deal. "With this capital raised, UEC is in a strong financial position to advance our portfolio of uranium projects with ongoing exploration and production permitting at the Burke Hollow ISR project in South Texas, permitting for baseline studies at the Anderson project in Arizona and exploration/permitting at our ISR projects in Paraguay."