TRUMP EXECUTIVE ORDERS TRIGGER URANIUM RALLY

Trump Executive Orders will reshape global uranium demand

On 23 May, President Trump issued four executive orders (EOs) designed to streamline regulatory processes, promote new build of existing technology and fast track SMRs and new nuclear technologies.  The US will now pursue the goal of quadrupling its nuclear fleet to 400 GW by 2050.  The objective is to make the US the world leader in nuclear energy, which is likely to fundamentally reshape demand from the world's largest uranium consumer.

The Reinvigorating the Nuclear Industrial Base EO includes objectives to fund 5 GW of power uprates to the existing fleet and ten new GW-scale reactors into construction by 2030, support the restart of closed plants and finish half-built reactors.  Further, the Department of Energy (DoE) will work with the Department of Defence (DoD) to examine the feasibility of restarting or repurposing closed nuclear power plants as energy hubs for military micro-grid support. 

Complementing these civil objectives, the Nuclear Energy for National Security EO directs the DoD to work with DoE to identify nine military sites that can host nuclear reactors.  In addition to enhancing the effectiveness of those bases, DoD can regulate reactors on its sites, providing an expedited route for commercial demonstration of SMRs, which can then be leveraged for civilian use cases.

The remaining executive orders reform the Nuclear Regulatory Commission (NRC) permitting process, including dealing with numerous unproductive absurdities required to gain site approvals, and promote development of SMRs and new technologies through the DoE rather than the slow and permit-laden NRC approach to prototyping that is currently bogging down new technologies. The NRC have been given 18 months to determine new reactor licence applications, versus the current 5+ year process.

These orders are well considered and are the product of substantial industry consultation by multiple agencies.  The rationale that underpins the ambition of the policy is consistent with the first Trump administration's 2018 response to the s232 trade investigation into nuclear fuel, detailed in the white paper Restoring America's Competitive Nuclear Energy Advantage.  Nonetheless, it is likely that the nuclear industry will be caught off guard by the pace of change.  Tradetech today commented that “Market participants who have been following news reports throughout the week… were surprised at the multiple EOs and the broad scope of the directives.”

It is worth watching all 26 minutes of the White House signing ceremony including the comments made by Constellation’s Joe Dominguez, NEI’s Maria Korsnick and Oklo’s Jacob DeWitte.

Growth in the US nuclear industry is seriously lagging China, which is implementing a build programme of 150 large scale reactors over 15 years.  Since 2022, China has approved ten reactors each year, with last month’s announcement identifying the extraordinary reduction in capital cost that series production delivers. The latest batch of Chinese reactors is expected to be constructed at a capital cost of just US$2,700 per installed kW of capacity – less than half of the cost of successful construction in the West. 

With Deepseek turning the AI landscape into an arms race, the Trump administration is determined to ensure that nuclear energy is rapidly upscaled to maintain the AI advantage that the US still holds over China. The administration’s new goal of 400 GW of US nuclear capacity by 2050 is necessary to enable the US to compete with China’s nuclear growth trajectory.

The Big Short (squeeze?)

Whilst ASX uranium stocks traded well on Friday in anticipation of the orders, trading in North America post-signing suggest a strong rally ahead.  ETFs traded well – for instance, URA was up 11% on record volume – signalling a capitalisation round that will drive passive buying into the sector.  

A unique feature of the year-to-date volatility has been the unprecedented level of short interest in ASX uranium stocks.  The short trade started as company specific short-selling in the second half of 2024 – Bannerman’s low risk profile left it unaffected during this phase, with short interest generally below 1%.  After the volatility of “Deepseek week” in January, this trade ballooned into a sector-wide short, with uranium companies comprising four of the five most shorted stocks on ASX.  The short trade and its misconceived basis is explained very well, as usual, by Goehring and Rozencwajg in their Q1 2025 Market Commentary.    

At the time of writing, Bannerman’s visible short interest is 14 million shares (just under 8% of our register).  For comparison, BMN traded less than 2 million shares on Friday despite closing up more than 10% on the day. 

Amidst the recent feast of positive sector developments, Trump’s Executive Orders and the resultant media coverage should finally trigger the unwind of this successful but exhausted trade.  Should this be the case, it will be fascinating to watch how short sellers will achieve the buying back of these enormous obligations, given they will not only be competing against each other, but also passive ETF buying and institutional investors that have been waiting for a clear sign of the sector bottoming before building positions. 

Recent Interviews

Last month we held our quarterly update webinar for the quarter ended 31 March 2025. I provided investors with an overview of the quarter, including progress made at our Etango Uranium Project in Namibia and insight into what we are seeing in the sector. Following this we opened the floor to questions, which included:

• The broader uranium market and supply and demand deficit

• Impacts to supply from recent rainfall events in Namibia

• Key catalysts for the uranium industry to see sentiment turn more positive

• SPUT cash balance and short selling narratives

• Utility contract and RFPs

• Substantial shareholder notifications and implications

If you missed the webinar you can see a recording here. Quarterly webinars are a new edition to our communications, enabling investors to ask their questions following the release of our quarterly reports. Details to join the webinar will be released the week before the quarterly is released so keep your eyes out for this next quarter. 

On 28 April I caught up in London with Matt Gordon from Crux Investor. We discussed my view that the sector had bottomed and where we find ourselves at this point of the cycle. We had a detailed discussion about execution risk in construction and I highlighted why this is one of the most important areas of focus for our Chief Executive Officer, Gavin Chamberlain. Watch the full interview here.

Whilst uranium investment sentiment is likely to now turn, the current dislocation between long-term fundamentals and global uranium trading conditions remains sharp. However, I remain optimistic on the potential for a recovery in utility contracting appetite through H2 2025. Accordingly, Bannerman remains well positioned to capture the value from an enhanced contracting cycle when this dislocation eases.

In the meantime, our strong balance sheet and gated approach to project development means that we can comfortably progress our early construction works program, putting ourselves in a stronger position to finalise suitable offtake and financing agreements when the time is right.