Factbox: How investors boost exposure to physical uranium

Sprott Physical Uranium Trust

20/02/2024 06:30

LONDON, Feb 20 (Reuters) - Physical uranium is gaining
traction as a traded commodity for investment banks like Goldman
Sachs and an investment for hedge funds after prices of the
nuclear fuel ingredient soared to 16-year highs.  
    
    Below are details of the mechanics of how funds source and
store physical uranium: 
   
    Funds that invest in physical uranium buy uranium oxide
concentrate (U3O8), or yellowcake, which is created by milling
and chemically-processing uranium ore, separating uranium from
waste rock.
    Yellowcake has low radioactivity and needs further
processing or enrichment before it can be used as nuclear fuel,
but the whole uranium sector is highly regulated as the metal
can also be used for weapons.
    In the West, there are only three licensed storage
facilities where investors can store physical uranium: Cameco
 CCO.TO  in Canada, ConverDyn in the United States and Orano in
France.
    Financial institutions of all types hold about 113 million
pounds of uranium, according to consultancy UxC. This is
equivalent to roughly 65% of the current annual global
consumption of uranium by nuclear power plants.
    
    THE FUNDS:
    SPROTT PHYSCIAL URANIUM TRUST
    Canada-based Sprott  U_u.TO  launched in 2021 and is the
largest with 63.6 million pounds of uranium. Last year it bought
4 million pounds and in January purchased 400,000 pounds.
    
    YELLOW CAKE
    London-listed Yellow Cake plc  YCA.L  launched in 2018 and
has 20.2 million pounds. It has an agreement with the world's
biggest uranium producer Kazatomprom  KZAP.KZ , giving it the
option to purchase up to $100 million of uranium each year.
    
    ZURICH-INVEST AG
    The Switzerland-based fund offers its Uranium Actively
Managed Certificate, which buys physical uranium. It does not
publicly disclose its uranium holdings.
    
    ANU ENERGY
    Kazatomprom was a seed investor in ANU Energy, a
privately-owned physical uranium investment fund launched in
2021 that targets Asia and the Middle East. 
    The initial investment was $74 million and other major seed
investors were Kazakhstan's sovereign wealth fund and the
investment wing of the country's central bank. It is planning a
public or private placement of up to $500 million, but has not
said when. 
    

 (Reporting by Eric Onstad; Editing by Emelia Sithole-Matarise)
 ((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO;
 Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net))