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Biden Administration Moving Forward With Trump-Era Proposal For US Uranium Reserve

Biden Administration Moving Forward With Trump-Era Proposal For US Uranium Reserve

The Biden administration is taking steps to establish a US uranium reserve, a proposal put forward by the Trump administration which could boost mining of…

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Biden Administration Moving Forward With Trump-Era Proposal For US Uranium Reserve

The Biden administration is taking steps to establish a US uranium reserve, a proposal put forward by the Trump administration which could boost mining of the mineral as well as the potential to expand nuclear energy in the United States.

"Yellowcake" uranium coming off a conveyor line

In Tuesday testimony before the Senate Energy and Natural Resources Committee, Energy Secretary Jennifer Granholm said that her department is laying the groundwork for such a move.

"We’re about to issue a request for information [RFI] regarding establishing a reserve," she said, adding "We are, I think this month, issuing an RFI on that."

Jennifer Granholm

In a major funding bill passed late last year, Congress set aside funds to establish the strategic reserve, which would buy US-mined uranium from domestic producers, which we assume is separate from the US reserves bought by Russia during Hillary Clinton's Uranium One scandal.

When asked why the Biden administration's budget request for 2022 didn't include funding for the reserve, Granholm cited the existing funding for the project.

"It had been appropriated for last year so it’s carrying over," she said.

A 2020 Trump administration report endorsed spending millions on the reserve, which would aim to boost domestic mining.

The concept is similar to that of the already existing strategic petroleum reserve, where the government can hold up to 714 million barrels of that fuel in case of an emergency.  -The Hill

Zero Hedge readers will recall our coverage on the uranium sector, which we said in April was set to benefit from several factors - including upcoming infrastructure spending, the reddit short squeeze crowd, an extremely bullish case laid out by a BofA analyst, and a passionate tweetstorm by former hedge fund manager Hugh Hendry, who said "A lot of you are invested in uranium. I commend you. I wish I was. Uranium is the rockstar of commodities. It doesn't mess around - bull and bear markets are of epic proportions."

Furthermore, Michael "big short" Burry advocated for converting US to nuclear power as a way for Democrats to create jobs in a 'green' industry.

Related stocks moved higher on the news.

And to review what we said in April:

The first reason is a mix of regulatory and market developments.

As we reported earlier today, the spot price for U3O8 moved above $30 per pound for the first time this year as uranium producers and mine developers hoovered up above-ground inventories and reactor construction continues apace. Two new research notes from BMO Capital Markets and Morgan Stanley say today’s price marks a floor and predict a rally in prices over the next few years to the ~$50 level by 2024, which - all else equal - would translate into soaring stock prices for names such as CCJ, UEC, URA and URNM.

Indeed, as Mining.com said, the stars seem to be aligning for a new phase of nuclear energy investment with the US, China and Europe bolstering the bull case for the fuel this month.

And while nuclear energy was not (yet) mentioned explicitly in the $2 trillion Biden infrastructure proposal released today, its federally mandated “energy efficiency and clean electricity standard” is hardly achievable without it. 

Curiously, the big regulatory move may be coming out of Europe, where - as we expected - Uranium is now officially part of the cool ESG crowd as over the weekend leaked documents showed a panel of experts advising the EU is set to designate nuclear as a sustainable source of electricity which opens the door for new investment under the continent’s ambitious green energy program.

Then there is China - as Mining.com notes, China’s 14th five-year plan released a fortnight ago also buoyed the uranium market with Beijing planning to up the country’s nuclear energy capacity by 46% – from 48GW in 2020 to 70GW by 2025. There are several factors working in uranium’s favor, not least the fact that annual uranium demand is now above the level that existed before the 2011 Fukushima disaster when Japan shut off all its reactors:

  • Uranium miners, developers and investment funds like Yellow Cake (13m lbs inventory build up so far) are buying material on the spot market bringing to more normal levels government and utility inventories built up over the last decade

  • Major mines are idled including Cameco’s Cigar Lake (due to covid-19) which accounts for 18m lbs or 13% of annual mine supply.  The world’s largest uranium operation McArthur River was suspended in July 2018 taking 25m lbs off the market

  • Permanent closures so far this year include Rio Tinto’s Ranger operation in Australia (3m lbs) and Niger’s Cominak mine (2.6m lbs) which had been in operation since 1978. Rio is exiting the market entirely following the sale of Rössing Uranium in Namibia

  • Like Cameco, top producer Kazatomprom, which mined 15% less material last year due to covid restrictions has committed to below capacity production (–20% for the state-owned Kazakh miner) for the foreseeable future

  • Price reporting agency and research company UxC estimates that utilities’ uncovered requirements would balloon to some 500m lbs by 2026 and 1.4 billion lbs by 2035  

  • Roughly 390m lbs are already locked up in the long term market while 815m lbs have been consumed in reactors over the last five years, according to UxC

  • There are 444 nuclear reactors in operation worldwide and another 50 under construction – 2 new connections to the grid and one construction start so far in  2021

  • Much cheaper and safer, small modular nuclear power reactors which can readily slot into brownfield sites like decommissioned coal-fired plants (or even underground or underwater) are expected to become a significant source of additional demand.

The last bullet brings us to reason number 2: the coming "small modular reactor" frenzy:

As Nikkei Asia reports today, one of Japan's top industrial engineering companies will join a US-led project to build a new type of nuclear power plant designed with added precautions against meltdowns. These plants will be built in the US, where they will propel the uranium sector to level it hasn't seen in decades (indicatively CCJ traded roughly double where it is today as just before the 2008 financial crisis).

According to the Nikkei, Japan's JGC Holdings will help build a plant in the state of Idaho designed by NuScale Power, an American company whose proposal for a small modular reactor (SMR) involves immersing the containment units in a pool of water.

Small nuclear reactors have been hailed as an option for replacing fossil fuel power plants as nations commit to cutting carbon dioxide emissions in the coming decade

And here, we get one step closer to Uranium becoming part of ESG: when Joe Biden meets Japanese Prime Minister Yoshihide Suga for a summit in the U.S. later this month, fighting climate change will be on the agenda and "small nuclear" - and uranium - will be high on the agenda.

JGC has invested $40 million for a roughly 3% stake in NuScale, one player in the emerging field of SMRs. The Japanese group will work with NuScale's parent, U.S.-based engineering company Fluor, on construction management and other aspects of the Idaho project.

One thing is clear: as the SMR strategy takes off, much more uranium will be needed, as the partners eventually could set their sights on similar projects in the Middle East - where JGC boasts a long track record in oil and petrochemical infrastructure - and Southeast Asia. In fact, the entire world could soon be covered in small, safe nukes which will lead to an unprecedented renaissance for the uranium sector.

Why the scramble for SMR?

The first reason is simple: price. Nuclear plants on the scale of 1,000 megawatts cost around $10 billion to build using established reactor designs. NuScale's SMR design - which completed a technical review by the U.S. Nuclear Regulatory Commission in August 2020, ahead of rival proposals - reportedly costs around $3 billion for more than 900 MW. The Idaho plant will have a capacity between 600 MW and more than 700 MW, according to announced plans. NuScale also has a strategic partnership with South Korea's Doosan Heavy Industries and Construction, which will supply components for the plant.

The second, and far more important reason, is safety. Japan's Fukushima nuclear disaster a decade ago shows what happens when reactor cooling systems break down. The loss of emergency power after a devastating 2011 tsunami led to reactor meltdowns at the Fukushima Daiichi plant operated by Tokyo Electric Power Co. Holdings. Well, NuScale's SMR design seeks to remove this risk, as the water in the pool takes a month to evaporate and helps keep the reactor's temperature down.

The U.S. government supports research and development in small-scale reactors. A Green Growth Strategy announced by Japan last year calls for "providing active support" to Japanese companies participating in experimental overseas projects in this field. Many existing nuclear plants in Japan, the U.S. and other advanced economies have been in operation for decades and require upgrades or decommissioning.

In short, between recent bullish market dynamics, and a sector that is on the cusp of becoming the next ESG craze, the promise of new SMR technologies could ensure uranium demand is stable for decades, leading to a new golden age for uranium stocks.

Tyler Durden Tue, 06/15/2021 - 14:15

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Government

Top Stories This Week: Gold Manipulators Go to Court, Silver’s Industrial Side in Focus

Catch up and get informed with this week’s content highlights from Charlotte McLeod, our editorial director.
The post Top Stories This Week: Gold Manipulators Go to Court, Silver’s Industrial Side in Focus appeared first on Investing News Network.

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The gold price held above US$1,800 per ounce this week, finishing the period around that level, which is down from last week’s July high point of around US$1,830. 

Marc Lichtenfeld of the Oxford Club is one market watcher who’s struggling to understand why gold isn’t doing better this year. We had the chance to speak this week, and he pointed to money printing, the impact of COVID-19 and inflation as factors that should be pushing gold to record highs.

So far in 2021 those elements have have failed to do the trick, and Marc said he sees a disconnect between the yellow metal’s traditional fundamentals and what’s happening in the market.

 

Dig In To Find Out The Latest Outlook On Rare Earth

   
All The Information You Need To Make Wise Investments. Don't miss out!
 

“There just seems to be a disconnect between what are the traditional gold fundamentals and what’s happening out in the world … it’s really difficult to try to figure out what is happening with gold and why gold isn’t at record highs” — Marc Lichtenfeld, the Oxford Club

Of course, some would argue that price manipulation is the reason gold isn’t moving, and this week there was more news on that front. Chat logs were released in a spoofing trial for two former precious metals traders from the Bank of America’s (NYSE:BAC) Merrill Lynch unit, and they show one of the traders bragging about how easy it is to manipulate the price of gold. The trial isn’t over yet, but in its opening arguments that trader’s attorney said he stopped spoofing after he found out it was illegal.

Looking over to silver, I heard this week from Collin Plume of Noble Gold Investments, who thinks industrial demand will help push the white metal above the US$40 per ounce mark in the next 12 to 18 months. Silver has struggled to pass US$30 so far this year.

Solar panels are one of silver’s key uses, but it’s also found in other high-tech applications such as electronics and electric vehicles. Collin isn’t aware of any commodities that can replace silver in its end-use markets, and with demand “through the roof,” he expects to see shortages of silver by next year.

With silver in mind, we asked our Twitter followers this week if they think its industrial or precious side is driving the most demand right now. By the time the poll closed, about 70 percent of respondents said they think the precious angle is more important.

 

Uranium Soared Last Year While Other Resources Tumbled

 
What's In Store For Uranium This Year? Find Out In Our Exclusive FREE 2021 Uranium Outlook Report featuring trends, forecasts, expert interviews and more!
 

We’ll be asking another question on Twitter next week, so make sure to follow us @INN_Resource or follow me @Charlotte_McL to share your thoughts.

We’re going to finish up with the cannabis space, where there was a major announcement last week.

A group of Democratic senators headed by Senate Majority Leader Chuck Schumer introduced a draft of the Cannabis Administration and Opportunity Act, which among other things would remove cannabis from the Controlled Substances Act. The long-awaited bill will need 60 votes to get through the Senate, and opinion is split on whether that will actually happen.

INN’s Bryan Mc Govern spoke with Dan Ahrens of AdvisorShares Investments, who thinks it has “no chance of passing,” but remains optimistic about prospects for American cannabis companies.

“No one should expect US (cannabis) legalization anytime soon. We should expect reforms; they’re not coming as fast as anyone would like to see, but everybody agrees we’re going to get some form of banking reform in the near future … we’ll see baby steps” — Dan Ahrens, AdvisorShares Investments

Why? In his opinion, these stocks remain undervalued compared to their Canadian counterparts, and are operating well even without federal cannabis approval. Any legalization progress would be a bonus.

Want more YouTube content? Check out our YouTube playlist At Home With INN, which features interviews with experts in the resource space. If there’s someone you’d like to see us interview, please send an email to cmcleod@investingnews.com.

And don’t forget to follow us @INN_Resource for real-time updates! 

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

 

Profit from resource markets this year

   
Read our new report to get started!
 

The post Top Stories This Week: Gold Manipulators Go to Court, Silver’s Industrial Side in Focus appeared first on Investing News Network.

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Economics

Top 5 Rubber Stocks to Buy in 2021

Here are some of the best rubber stocks to buy right now. Increased demand and supply chain disruptions are putting pressure rubber prices.
The post Top 5 Rubber Stocks to Buy in 2021 appeared first on Investment U.

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When it comes to investing, all the attention tends to go to healthcare, tech and increasingly renewable energy. But these aren’t the only stocks on the block, and some old mainstays can also add value to your portfolio. One of those old, reliable industries is rubber: it always has some level of demand, and that won’t likely change anytime soon. But recent economic conditions make rubber even more intriguing than usual. One of the biggest uses of rubber is car tires, and sharp economic recovery is likely to mean a sharp demand for new cars. Hence, we may also see a sharp increase in demand for rubber as many people head to the dealer to buy a new car. There’s more to it than just the auto industry, of course. CNBC reported that disruptions in the supply chain are also causing major disruptions. And we use rubber for many different essential items, including personal protective equipment and countless other items. With increased demand and supply chain disruptions, rubber stocks are poised for a rise. Here are some of the best rubber stocks to buy:
  • Goodyear Tire & Rubber (Nasdaq: GT)
  • Trinseo (NYSE: TSE)
  • Michelin (OTC: MGDDY)
  • Carlisle Companies (NYSE: CSL)
  • Protolabs (NYSE: PRLB)
If you’ve never invested in rubber stocks before, you might be wondering if they are a good investment. Let’s consider that question before looking at each stock more closely. And if you want to see how your investment portfolio might grow, check out our free investment calculator.

Is Rubber a Good Investment?

Rubber can certainly be a good investment because it is nearly ubiquitous; it is used in many different products, including tires, footwear, pharmaceuticals, textiles and many other products. As Zacks notes, rubber is among the most profitable industries when it comes to natural resources. But rubber isn’t exactly the most innovative product. Perhaps it was decades ago, but these days, it’s something most of us are just used to seeing. We don’t really demand rubber so much as the products that contain it. Hence, it’s only when demand for those products increases that the demand for rubber spikes. And as mentioned earlier, we are at a point right now where many people are looking to buy new cars, and rubber’s use in tires could cause a surge in demand. However, these things can be very cyclical. The Zacks page linked above highlights this very well. There, you can see the rubber tires industry has a YTD performance of 42.90% compared to 16.09% for IVV, an S&P 500 fund. But as good as that sounds, the 5-year performance for rubber tires is -33.71% compared to 112.67 for IVV. Given the downside risk, rubber is probably best used as part of a balanced portfolio containing more well-round assets, such as funds like IVV.

Rubber Stocks to Buy Now

If you want to “bounce” your returns upward with rubber stocks, here are some of the best rubber stocks to buy right now. Keep an eye on them as the situation with the auto industry progresses.

Goodyear Tire & Rubber

Goodyear Tire & Rubber is a tire manufacturer that makes tires for a variety of uses. Tires for automobiles are one of the biggest uses of Goodyear tires. However, they are also used on buses, trucks, aircraft, motorcycles, mining equipment, industrial equipment and farm equipment. In addition to the Goodyear name, it also has Dunlop and Kelly tires under its belt. Goodyear has been around since 1898 and was the first global tire manufacturer to enter the Chinese market. It produces a range of tires, rubber products and chemicals across the U.S. and Canada.

Trinseo

Trinseo is a global materials company that manufactures latex, plastics and synthetic rubber. Notably, it produces plastic for Lego. When it comes to rubber, Trinseo produces styrene-butadiene rubber (SSBR). This material is primarily used in high-performance tires. In addition to Legos, its plastic is used in automotive applications, LED lighting and medical devices. Trinseo is growing rapidly, with 17 manufacturing and 11 research facilities worldwide. In addition, it is already seeing healthy revenue increases as it continues to grow. Its website notes Trinseo is “dedicated to making a positive impact on society,” and it will support the “sustainability goals of our customers in a wide range of end-markets.”

Michelin

Michelin is another name that is big in the tire manufacturing business, and the demand for new cars places it squarely on this list. In addition to the Michelin tire brand, the company also owns BFGoodrich and Uniroyal. BFGoodrich is a premium tire brand for sports cars, offroad vehicles and light trucks. Michelin is the largest tire manufacturer in the US and the second-largest in the world. It has 34 plans in two countries and had over $8 billion of sales in 2020. Its revenue has been increasing, as has its stock price. As the situation with the auto industry evolves, it will be interesting to see how Michelin fares.

Carlisle Companies

Founded in 1917 and based in Scottsdale, Arizona, Carlisle Companies is about more than just rubber. It is more of an umbrella under which there are a number of different operations. Its products and services include healthcare, commercial roofing, aerospace and electronics, lawn and garden, agriculture, energy, mining and construction equipment, and dining. Of course, there are many uses for rubber and plastic across these industries. In 2018, Carlisle Companies released a plan called Vision 2025 in which it detailed how it will continue to grow over the next 100 years.

Protolabs

Protolabs is an intriguing company. It produces low-volume 3D printed, CNC-machining, sheet metal fabrication and injection-molded custom parts. These parts are then used for short-run production and in prototypes. The company describes itself as the “world’s fastest digital manufacturing service.” It also provides rubber, metal and commercial plastics. Given its business model, it was able to produce several items during the coronavirus pandemic, including face shields, plastic clips and items used in test kits. They were in turn used in Minnesota hospitals, where the company is based.

More Investing Opportunities

The rubber stocks above might produce some big returns for investors. Although, there are many industries and stocks to choose from. So, here are some more investing opportunities and research… If you’re looking for expert analysis delivered straight to your inbox, consider signing up for Profit Trends. It’s a free e-letter that’s packed with investing tips and tricks. Whether you’re new or already an experienced investor, there’s something for everyone. The post Top 5 Rubber Stocks to Buy in 2021 appeared first on Investment U.

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Federal Court Rules CDC’s COVID-19 Eviction Moratorium Is Unlawful

Federal Court Rules CDC’s COVID-19 Eviction Moratorium Is Unlawful

By Jack Phillips of Epoch Times

A federal court on Friday ruled that the U.S. Centers for Disease Control and Prevention (CDC) overstepped its authority by halting evictions.

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Federal Court Rules CDC's COVID-19 Eviction Moratorium Is Unlawful

By Jack Phillips of Epoch Times

A federal court on Friday ruled that the U.S. Centers for Disease Control and Prevention (CDC) overstepped its authority by halting evictions during the COVID-19 pandemic.

The Cincinnati-based U.S. Sixth Circuit Court of Appeals unanimously agreed (pdf) with a lower court ruling that said the CDC engaged in federal overreach with the eviction moratorium, which the agency has consistently extended for months. Several weeks ago, the CDC announced it would allow the policy, which was passed into law by Congress, to expire at the end of July.

Dr. Rochelle Walensky, director of the Centers for Disease Control and Prevention (CDC), testifies during a Senate hearing in Washington, on July 20, 2021. (Stefani Reynolds-Pool/Getty Images)

“It is not our job as judges to make legislative rules that favor one side or another,” the judges wrote. “But nor should it be the job of bureaucrats embedded in the executive branch. While landlords and tenants likely disagree on much, there is one thing both deserve: for their problems to be resolved by their elected representatives.”

The ruling upheld one handed down by U.S. District Judge Mark Norris, who in March blocked enforcement of the moratorium throughout western Tennessee.

Under the moratorium, tenants who have lost income during the pandemic can declare under penalty of perjury that they’ve made their best effort to pay rent on time. The CDC claimed the measure was necessary to prevent people from having to enter overcrowded conditions if they were evicted, which would, according to the agency, impact public health.

Previously, the CDC’s lawyers argued in court filings that Congress authorized the eviction freeze as part of its COVID-19 relief legislation, while simultaneously asserting that the moratorium was within its authority. Those arguments were rejected by the three-panel appeals court on Friday.

Demonstrators call for a rent strike during the COVID-19 pandemic as they pass City Hall in Los Angeles, Calif., on May 1, 2020. (Frederic J. Brown/AFP via Getty Images)

“What’s the difference between executive-branch experts and congressional ones? Executive-branch experts make regulations; congressional experts make recommendations,” the appeals court wrote. “Congressional bureaucracy leaves the law-making power with the people’s representatives—right where the Founders put it.”

But last month, the Supreme Court in a 5-4 decision rejected a different plea by landlords to end the ban on evictions.

Justice Brett Kavanaugh had written in an opinion (pdf) that while he believes that the CDC had exceeded its authority by implementing the moratorium, he voted against ending it because the policy is set to expire July 31.

“Those few weeks,” he wrote, “will allow for additional and more orderly distribution” of the funds that Congress has appropriated to provide rental assistance to those in need because of the pandemic.

The CDC moratorium has faced pushback from property owners as well as the National Association of Realtors.

“Landlords have been losing over $13 billion every month under the moratorium, and the total effect of the CDC’s overreach may reach up to $200 billion if it remains in effect for a year,” said the organization in an emergency petition to the Supreme Court.

It’s not clear if the CDC’s attorneys will appeal the ruling. The Epoch Times has requested a comment from the agency.

Tyler Durden Fri, 07/23/2021 - 19:40

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