Diminished Uranium Supply & Overwhelming Demand Driving Investor Reset

• Global nuclear reactor construction, life extensions, and efficiency upgrades are driving sustained and growing demand for uranium, especially from China and the U.S.
• The uranium supply chain faces long lead times, permitting delays, technical complexity, and geopolitical limitations, preventing a quick production ramp-up.
• Small Modular Reactors (SMRs) are opening new markets and synergizing with the rising energy needs of AI and data centers, adding unseen demand layers.
• Geopolitical dynamics are causing eastern producers like Kazakhstan to increasingly serve eastern markets, tightening western supply access.
• Industry veterans believe the uranium market is undergoing a long-term structural revaluation, not a short-term cycle, driven by systemic underinvestment in production.

After decades on the periphery, nuclear energy is regaining relevance in the global energy transition conversation. Its resurgence is powered by a unique convergence of needs: energy security, carbon neutrality, and the accelerating demand for reliable baseload power to support AI and data infrastructure. This revitalization is translating into rising uranium demand, the fuel that powers nuclear reactors. Yet, uranium’s constrained supply environment and the inherent complexity of scaling production make it an asset class that investors should evaluate seriously.

In a recent uranium macro panel discussion, John Cash (CEO of UR Energy) and Andre Liebenberg (CEO of Yellow Cake) offered grounded perspectives on the uranium sector’s fundamentals. Their insights provide institutional investors with a clearer picture of what’s driving the market—and what lies ahead.

Demand is Surging—Visibly & Invisibly

One of the key points both executives stressed is the broad-based nature of uranium demand growth. China has recently approved ten new reactors and is constructing 26 more. Similar momentum is seen in the UAE, Canada, and parts of Europe rethinking their nuclear phase-outs. Life extensions and power uprates for existing fleets—especially in the U.S.—are also boosting uranium demand without new reactor construction.

“Models are being rewritten almost weekly,” Cash noted, citing the unpredictable pace at which utilities are extending reactor lifespans, increasing power outputs, and seeking higher enrichment levels.

Moreover, small but growing drivers like Small Modular Reactors (SMRs) and data center energy demand are adding to baseline growth. As Liebenberg explained, the nuclear sector’s relevance has moved beyond decarbonization to energy sovereignty and national security, expanding its geopolitical appeal.

Supply Response is Lagging—By Years

Against this backdrop, the uranium supply chain is struggling to respond. The supply side is constrained by a range of long-cycle factors, including:

• Lack of skilled labor and drill rigs
• Multi-year permitting timelines (often five years or more in the U.S.)
• Long build-out and ramp-up phases
• Persistent geopolitical and infrastructure challenges

Even high prices have not immediately incentivized production. Cash noted, 

"We're in a really strong market. Long-term prices at 80. Yet you see how much [less] production's been brought online globally, even though the price has been at 80 for quite some time."

Liebenberg added that developers have deferred projects even at current price levels, indicating that $80 per pound may not be a sufficient incentive price in many cases. Some projects may only proceed closer to $100–$120/lb, with Bank of America forecasting $135/lb by 2027.

Supply Chain Bottlenecks & Infrastructure Risks

Beyond mining, the uranium supply chain is also constrained in downstream steps—namely conversion and enrichment. Western capacity in these segments is underbuilt and capital-intensive to expand. Cash noted, 

"I think the greater bottleneck right now is conversion. We're just severely limited in the West, in particular in conversion capacity.” 

There’s very limited capacity in the West, and building new infrastructure takes years and billions of dollars. Utilities need to commit to long-term contracts to underwrite those investments.

Enrichment is also a challenge, with limited capacity and geopolitical sensitivities surrounding its expansion. These downstream limitations further slow the supply response and reinforce the tightness of the uranium market.

Geopolitics Are Reshaping the Market

The bifurcation of uranium supply chains is another key trend. Kazakhstan, the world’s largest uranium producer, has historically supplied both eastern and western utilities. However, logistical and geopolitical headwinds are increasingly steering those pounds eastward.

Liebenberg emphasized that this is not politically motivated but driven by commercial and logistical ease. It’s easier to put the material on a train to China or Russia than ship it to the West. Nevertheless, the implications are significant.

Western utilities face growing challenges in sourcing from reliable and politically aligned jurisdictions. This adds a layer of supply insecurity that is likely to affect procurement strategies and pricing dynamics in the coming years.

John Cash, CEO of US producer, Ur-Energy & Andre Liebenberg, CEO of Physical Uranium Holder, Yellow Cake Plc

The Rise of Small Modular Reactors (SMRs)

Both panelists highlighted the game-changing potential of SMRs. Unlike conventional reactors that require massive upfront investment and grid integration, SMRs can serve smaller markets and decentralized demand centers.

“SMRs opens up opportunities in in countries where big reactors don't make sense...” 

Liebenberg cited use cases across Africa and Canada. Cash pointed out that companies like BWXT and Radiant are developing SMRs specifically for remote industrial applications in Wyoming and beyond.

SMRs also align closely with the growth of big data and AI training centers, which require stable, off-grid power in remote locations. Cash stated,

"...big data wants carbon-free..they're just a match made in heaven."

Structural Re-Rating, Not a Cyclical Rally

There is growing consensus among sector veterans that uranium is undergoing a structural rerating rather than a short-term speculative cycle. Historical context supports this. Spot prices surged to $136/lb in 2007 without triggering meaningful long-term production, as permitting and technical bottlenecks proved insurmountable for many. Cash explained,

"...we're not in a cycle here. I think we're just in a fundamental change in how the world perceives and demands nuclear power..."

Liebenberg concurred, noting that volatility has increased, but the long-term direction remains intact. 

"...the overall trend is still upwards. But [one time] it's up a bit,  [then] back a bit. It's not unhelpful to have some stability."

Valuation Implications and Investor Positioning

Current valuations may not fully reflect the strength of uranium’s underlying fundamentals. Publicly listed physical uranium holders like Yellow Cake offer investors direct exposure to price appreciation. Since its IPO in 2018, Yellow Cake has seen the value of its uranium inventory grow substantially, having purchased initial pounds at $21/lb.

Producers like UR Energy provide leveraged exposure to rising prices, particularly those already in production. Cash noted,

"...we want to lock in good revenues now because as we get ramped up to full production, we're going to be profitable now”

UR Energy is not waiting for a hypothetical future; it is already generating revenue under contracts extending through 2030.

Both models have merit, and institutional investors may consider diversified exposure across different parts of the value chain—physical holders, near-term producers, and strategic developers.

Risks: Timing, Supply Disruptions, and Dilution

Despite the compelling thesis, investors should be aware of several risks:

• Timing: Spot price volatility can affect short-term equity valuations. Entry timing matters for optimizing returns.
• Supply uncertainty: Weather, labor disruptions, and geopolitical developments can delay production or cap output.
• Capital markets risk: While capital is available, weaker equity prices can force companies to issue more shares, increasing dilution.

Liebenberg stressed that while the thesis is broadly accepted, 

"We talk to alot of investors and.there are very few that question the thesis... their big issue is timing."

It suggests that capital is waiting on the sidelines for more price momentum or clarity on geopolitical issues.

A Market at an Inflection Point

The uranium sector stands at a structural inflection point. Demand growth—fueled by traditional reactors, life extensions, SMRs, and data centers—is robust and visible. Supply, however, remains constrained by permitting delays, infrastructure bottlenecks, and geopolitical realignment.

This supply-demand imbalance is likely to persist through the decade, even if prices rise. As a result, both uranium prices and the valuations of well-positioned companies may benefit from long-term tailwinds. For investors seeking exposure to decarbonization, energy resilience, and critical resource bottlenecks, uranium warrants careful consideration.