Australian uranium miners soar after US nuclear plant revival deal

DEEP YELLOW

24/09/2024 06:36

Sept 24 (Reuters) - Shares of Australian uranium miners
surged for a second day on Tuesday after Microsoft signed a deal
to help resurrect a U.S. nuclear power plant, fuelling hopes
that growing demand from big tech firms for green power could
fuel demand for nuclear energy.
    A deal between U.S.-based utility Constellation Energy
 CEG.O  and Microsoft  MSFT.O  to revive a unit of the Three
Mile Island nuclear power plant in Pennsylvania triggered trades
on heavily shorted Australia-listed uranium stocks, said Guy
Keller, a portfolio manager with Tribeca Investment Partners.
    Big Tech's growing love affair with technology like
artificial intelligence is resulting in a surge in electricity
demand to power data centres, with relatively clean energy
sources like nuclear power becoming more popular.
    Perth-based Boss Energy  BOE.AX , which is targeting uranium
output of 850,000 pounds in fiscal year 2025, soared as much as
11.6% on Tuesday on top of its 8% gain in the previous day. 
    Paladin Energy  PDN.AX , Australia's biggest pure-play
uranium miner in terms of market value, advanced 9.5% after a
roughly 5% gain in the previous session, while Deep Yellow
 DYL.AX  jumped 8.5% to scale a more than seven-week high.
    All the three stocks were the among top five gainers in the
ASX 200 benchmark index  .AXJO  on Tuesday.
    Paladin is Australia's fourth most heavily shorted stock,
according to data provider Shortman, while Boss Energy is ninth
and Deep Yellow is thirteenth.
    "There has... been fresh buying interest in the sector that
had been waiting for a catalyst," said Keller, adding that
seasonal buying would likely keep the sector buoyant for the
remainder of the calendar year.
    Demand expectations for uranium have climbed after more than
20 nations vowed to triple nuclear capacity by 2050 at the COP28
Climate Summit in Dubai late last year.
    "The amount of annual uranium demand could lift to over 500
million pounds against currently mined supply of around 155
million pounds," said Regan Burrows, a resource analyst at Bell
Potter Securities.

 (Reporting by Sameer Manekar in Bengaluru; Additional reporting
by Melanie Burton in Melbourne; Editing by Subhranshu Sahu)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar;))