Sprott buys most uranium in 2.5 years

[Ben Graham]

The Sprott Physical Uranium Trust (TSX: U.U for USD; U.UN for CAD), the world’s largest holder of the heavy metal, now has about 70 million lb. of uranium after it bought 450,000 lb. last week as nuclear energy’s strategic value comes into sharper focus.

The transaction on Friday brings to 950,000 lb. of uranium oxide (U₃O₈) Sprott’s weekly buy and its third quarter purchases to about 2.3 million lb., the highest since the first quarter of 2023, BMO Capital Markets analysts Helen Amos and George Heppel said in a note on Monday. The Trust’s holdings total a market value of about $5.53 billion (C$7.6bn), according to Sprott.

“With the trust poised to continue raising funds and the market heading into a seasonally stronger period for contracting in the fourth quarter, we could potentially see more spot purchasing of uranium in the near term, increasing the interest in the uranium market,” the analysts said.

The Friday purchase follows Sprott’s 50,000-lb. buy about one month ago, and coincides with the climbing spot uranium price, which gained about 1.3% to $77.25 per lb. of U₃O₈, its highest level since early July.

Securing uranium reserves

Meanwhile, the United States’ government is considering increasing its strategic uranium reserve to lessen reliance on Russian supplies and bolster confidence in nuclear power’s long-term potential, Energy Secretary Chris Wright said last week.

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Russian imports account for about a quarter of the enriched uranium needed by the US’ 94 nuclear reactors that produce about a fifth of the country’s electricity.

In 2024, the US purchased 50 million lb. of uranium, but only produced 677,000 lb., according to the Energy Information Administration. While decades ago, the US mined tens of millions of pounds of uranium, imports from countries such as Canada, Kazakhstan and Australia began to overtake domestic output in 1990, until American production fell to a low of 174,000 lb. U₃O₈ in 2019. Output has been slowly rising since then, increasing to 200,000 lb. U₃O₈ in 2022 then down to 50,000 lb. U₃O₈ in 2023, and increasing again last year.

India’s National Thermal Power Corporation, the country’s largest energy conglomerate is also examining the prospect of buying foreign uranium supplies to ensure availability for nuclear projects, the South Asian nation’s Economic Times newspaper reported on Sunday.

Prices benefit production

The spot price increase has also helped miners maintain steady output, with the world’s top producer Kazatomprom (LSE: KAP) posting a 13% year-on-year rise in production in Kazakhstan for the first half of 2025 to 12,242 tonnes, it said on Aug. 1.

Canadian uranium major Cameco (TSX: CCO; NYSE: CCJ) expects to produce 18 million lb. U₃O₈ this year from its mines in Saskatchewan, despite year-on-year output down 28% in the first half, it said in its second quarter results in July.

These production trends occur as demand for nuclear energy continues to rise as tech companies move to build more power-hungry data centres for AI applications. The US government is also working to accelerate nuclear’s rise through various supports and fast-tracking uranium projects in the country’s Southwest.

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Worldwide demand for uranium is projected to triple by 2040, showing the need to develop mines. Uranium demand already outpaces production by 50 million to 60 million lb. a year, according to World Nuclear Association data.

Sprott Uranium Trust shares were down 1.2% to $19.16 apiece on Monday morning, for a market capitalization of $5.45 billion. The stock has traded in a 12-month range of $12.65 to $20.50.