Uranium Miners ETF to be listed in Europe to provide investors with exposure to the nuclear energy sector
European ETF white labelling firm HANetf is listing the Sprott Uranium Miners UCITS ETF (ticker: URNM) on the London Stock Exchange (LSE). The ETF will be passported for sale across Europe.
The ETF seeks to benefit from the potential growth in nuclear energy and uranium demand. To do so, URNM will track the North Shore Sprott Uranium Miners Index. This index will include companies involved in the uranium industry, spanning the mining, exploration, development and production of uranium. The ETF is also permitted to invest in entities that hold physical uranium, uranium royalties or other non-mining assets. Sprott are experts in the uranium space, overseeing a US-listed ETF with around USD1.5 billion AUM and a physical uranium trust with over USD3 billion AUM.
The firm writes that in the wake of the Russian invasion of Ukraine, the UK government announced its intention to boost its homegrown energy supply, with nuclear power playing a key role. According to one government cabinet minister, the UK may have seven new nuclear power plants by 2050. According to some estimates, the UK could increase its reliance on nuclear energy to 25 per cent of its energy needs.
Similar debates are also taking place in the rest of Europe, the firm says. The EU currently relies on Russia for 45 per cent of its natural gas, showing the continent’s need to diversify its energy supply. Delaying the current planned closure of nuclear plants could see the EU reduce its gas demand by almost one billion cubic meters of natural gas per month.
Increased nuclear energy capacity is also being driven by climate change concerns. Nuclear energy produces the least CO2 and equivalent emissions compared to all other energy forms. It is already a key provider of zero-carbon energy. Nuclear currently generates 10 per cent of the world’s electricity supply but more than 50 per cent of zero-carbon emissions electricity. As a result, many believe that nuclear energy will play a key role in facilitating the transition to net-zero emissions.
Increased nuclear power use may mean increased demand for uranium, potentially boosting uranium prices, the firm says. High uranium prices may improve the profitability of uranium mining companies, potentially resulting in strong share price appreciation.
John Ciampaglia, Chief Executive Officer of Sprott Asset Management says: “The need for low emissions energy is critical: countries are committing to reducing their carbon footprint while global electricity demand is rising and many are facing energy insecurity from traditional fossil fuels. Moreover, while renewable energy sources will certainly have their place in the clean energy movement, many lack consistent base load power generation. We believe that nuclear energy may serve as a key solution to these energy and climate change initiatives. Uranium, the key element in powering nuclear energy, also stands to benefit from this shift towards nuclear power. However, major supply deficits currently exist which must be addressed to meet future demand. This may help usher in a new bull market for uranium prices and uranium mining equities.”
Hector McNeil, co-CEO and co-Founder of HANetf says: “The twin crisis of climate change and Russia’s invasion of Ukraine show the desperate need for the UK and other European nations to diversify their energy supply. We’ve seen bold government commitments on restraining the rise in global temperature to 1.5C but that will require a revolution in how we generate our energy. While wind and solar have made huge strides and will be core parts of future electricity generation, it is becoming clear that nuclear generation also needs to be part of the panoply of solutions.
“By launching a uranium mining ETF, we hope to give investors access to this theme. At HANetf we pride ourselves in bringing to the European market funds providing the solutions for a cleaner and greener world, be it wind and solar, physical carbon allowances, electric vehicle infrastructure – and now nuclear energy. URNM is the latest addition to our roster of thematic UCITS ETFs, the most extensive range of any ETF issuer in Europe. This is one of many UCITS versions of existing successful US ETFs that HANetf has brought to market in partnership with US asset managers including EMQQ, JETS, MMLP, IBUY and YODA.”