Australian uranium shares followed their North American peers higher on Wednesday after major producer Urenco USA said it would increase capacity in its enrichment facilities to offset a ban on Russian imports – three of the top four ASX performers on the day came from the Uranium space with Paladin Energy (ASX: PDN) +11%, NexGen (ASX: NXG) +9%, and Deep Yellow (ASX: DYL) +8% leading the line.
Urenco USA, the only commercial-scale uranium enrichment provider in the US, is going to expand its New Mexico facility in a multibillion-dollar project designed to strengthen the US nuclear fuel supply and reduce reliance on Russian uranium imports. The British-Dutch-German consortium plans to increase enrichment capacity at its New Mexico plant by almost 50%. The first of 24 new centrifuge cascades is expected to come online in 2032.
- The investment comes as the US works to replace Russian uranium supplies, which accounted for ~20% of domestic demand before the 2024 import ban.
The Trump administration is pushing to significantly expand US nuclear generation capacity amid surging electricity demand from AI data centres and broader electrification trends. However, the Energy Information Administration (EIA) has warned that US reactor operators could face uranium supply shortages over the coming decade without additional domestic fuel production. The investment reinforces the long-term structural demand story for uranium, with governments and utilities accelerating efforts to rebuild energy security and expand nuclear generation capacity. While the additional capacity will not arrive until the early 2030s, it underscores the long-term demand outlook underpinning uranium producers and developers globally.
- We remain very bullish towards the uranium thematic, agreeing with the EIA that uranium prices are set to trade significantly higher in the coming years.
MM is bullish towards the URNM ETF ~$12.25
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