Uranium supply risks: means lights out over Paris

Nuclear. That word has certainly lost favour in Australia since the election result. But will that have any impact on global uranium demand?

Don’t count on it! Australia is a fly on the wall when it comes to GLOBAL energy consumption. 

What matters to uranium demand is the volume of new nuclear facilities built across Asia and the potential reinstalment of older facilities in North America and Europe. 

So, is this the time for value-focused investors to invest in uranium stocks? Or will uranium capitulate further into a long-term bear market, like lithium?

To kick things off, I thought it might be interesting to explore that question by examining energy-starved Europe, a region begging for a nuclear solution and where the seed for much higher uranium demand could emerge.

The European Union has been shaken geopolitically and economically in recent years. Tensions with Russia, the region’s major gas exporter, have stirred the region’s long-term energy security.

Higher energy prices and falling productivity have wounded the once-mighty German manufacturing machine.

Add the EU’s ageing demographic; the region is poorly equipped to tackle problems like energy scarcity, sticky inflation, and declining productivity. 

But adding to its woes, the region’s most powerful ally—the US—is preparing to impose further tariffs while perhaps abandoning its commitment to NATO.

Yet, there is an economic island of sorts within the heart of the European Union—an energy oasis that offers the playbook to prevent Europe’s future economic rot.

This well-known country has spent decades preparing for this occasion by building a self-sufficient ENERGY FORTRESS. Remarkably, very few countries have taken notice or given this country the credit it deserves… So, what’s the country I’m talking about?

‘Vive la France!’

The French have (mostly) sidestepped Europe’s economic pain over the last two to three years, largely thanks to their ‘energy moat.’ Few realise that France is now an energy-independent nation.

Unlike most countries in the West, France has placed energy at the heart of its long-term planning. With its ENERGY FORTRESS established, France is now an electricity exporter!

Making billions selling excess capacity to its energy-starved neighbours all across Europe.

So, how does one of the world’s largest economies, which has barely any natural resources like oil, coal, or gas, generate more electricity than it needs?

The country’s patriarchal hero, Charles de Gaulle, planted the seed long ago, laying the groundwork for France’s future energy security.

De Gaulle was a statesman who led the Free French forces against Nazi Germany in World War II. He later rewrote the constitution of France and went on to become the country’s President

De Gaulle, a patriotic Frenchman who lived by the words: ‘Vive la France!’

Long live France.

No doubt, he’s experiences against Nazi Germany, which rampaged effortlessly through the country’s ill-prepared armed forces, led to that cause. A cause that would shape France into becoming a self-sufficient energy powerhouse.

Nuclear: How France Made It Work

De Gaulle strongly advocated for nuclear… In all of its forms. From the deadly… with the development of nuclear weapons to build the country’s defence capability. And nuclear power, which De Gaulle correctly predicted would fuel the country’s economic advantage.

Yet France was different from other ‘nuclear adopters.’

Unlike the US, Japan, or Germany, the French held an unwavering commitment to this vital energy source. The country hasn’t looked back since installing its first reactor in 1964.

Today, France generates almost 80% of its electrical needs from nuclear power, the highest share of any country in the world.

France offers a playbook for the effective deployment of nuclear energy and how it can strengthen resource-poor economies, even in an age of commodity scarcity.

While most nuclear critics draw on examples from Germany, Japan, and the US, pointing to their abandoned nuclear ambitions… Few have recognised the winning formula laid out by the French.

So, how is ‘nuclear France’ performing relative to its energy-starved peers?

One metric we can use is foreign direct investment, or “FDI,” the total investment flowing into a country. In 2024, the UN Trade and Development branch found that FDI fell a staggering 45% across Europe and as much as 60% in energy-hit Germany!

On all accounts, France fared much better in Europe’s economic meltdown… recording a modest lift in FDI of 1.9%.

According to official records, France also ranks the highest among all European nations in terms of its ‘investment attractiveness’—a title it has held for five consecutive years.

It’s also the most desirable country for industrial investment in Europe. No wonder!

But hardly anyone seems to be linking its ‘relative’ success to the country’s reliance on nuclear power.

France has established a massive competitive advantage thanks to its ability to generate cheap, base-load power. And in an era when the West faces declining productivity, ageing populations, unsustainable energy costs, and sticky inflation, nuclear truly is the economic prescription.

But there’s a catch….

France has one critical kink in its otherwise impenetrable energy fortress, which could have important implications for commodity investors.

Lights out over Paris

As I pointed out, France is not endowed with mineral wealth. According to the World Bank, the country imported about 12 million kilograms of natural uranium in 2023.

To put that in perspective, total global production that year was about 60 million kilograms.

That means France alone absorbed about 20% of the entire global supply!

But what would happen if more nations recognised France’s competitive advantage and pivoted to nuclear?  Yes, demand would eventually drive more output at uranium mines. But nothing moves quickly in the mining sector.

New mines take years, sometimes decades, to achieve approvals and financing. But these delays run especially deep in the uranium sector, with just a fraction of new mines coming online over the last two decades.

Then there’s the geopolitical angle...

Exposing France’s fragile supply

France was once a global empire, using its mighty fleet of naval vessels to secure international supply chains of key commodities like gold, sugar, tobacco, and rubber.

While France ‘officially’ surrendered its colonial breadbaskets years ago, powerful connections remain… What some might label as ‘hidden colonialism.’

France has maintained an active presence in its former colonies, especially mineral-rich West Africa.

Don’t be fooled! This is not about maintaining peace and democracy like the mainstream would have you believe. It’s about securing raw materials.

Over the years, France has deployed thousands of troops across uranium-rich Niger. This landlocked West African country holds some of the world’s largest uranium reserves and gifts France around one-third of its requirements.

And for years, the French, aided by local elites, have bled this uranium-rich country dry. Despite feeding France with an abundance of uranium and powering it toward economic dominance, Niger remains one of the poorest countries on Earth.

Famine, drought, war and poverty remain the daily plight of most people here. However, times are changing for the French and the West more broadly.

The West is Losing Its Grip on Established Supply Chains for Raw Materials

Across France’s former colonies, significant leadership changes are taking place. New Junta governments are replacing former pro-Western dictators. And these new leaders tend to despise Western governments and their international mining companies!

Gold miners across Mali are waking up to this new reality.

And in 2023, a coup d'état broke out in uranium-rich Niger, ousting the country’s President. Mohamed Bazoum was a cosy ally for the West, a key reason France had access to a cheap, reliable uranium supply.

But as I’ve outlined, that situation is looking precarious…

In 2024, the new Junta government cut military ties with the US, ordering 1,000 American troops out of the country. And since coming to power, it has cosied up to new allies in China and Russia, nations which are also keen to grab hold of Niger’s vast uranium reserves.

Clearly, France is losing its grip on Niger and West Africa more broadly.

The region has grown tired of feeding the West with abundant resources, receiving little in return. And that represents a significant threat to France’s ENERGY FORTRESS!

For the moment, Niger continues to export uranium to France. But how long that lasts is anyone’s guess! Approximately a third of France’s uranium supply comes from the Sahel…

A dispute that creates a sudden supply disruption will devastate France’s energy security.

Governments, investors and the West are not paying attention to this threat.

To make matters worse, several other supply threats exist beneath the surface in the uranium market.

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This edition is part of a three-part series originally published by James Cooper in Fat Tail Daily. If you'd like to get James’ perspective on where the uranium market might be headed over the coming months, you can read the final edition of this series (free) here.