Australia and Mongolia are two of the richest countries in terms of uranium reserves, with Australia having the largest uranium reserves in the world.

Australia is about to finalise a deal with China in which Australia will supply China with uranium.

“We believe that the final agreement (with Australia) will be reached very soon,” Chinese Assistant Foreign Minister, He Yafei told reporters.

We are not sure how many people realise how smart China is being here. We think it is possible that China already secretly plans, or intends to plan, hundreds of nuclear power plants across China to provide power for their ever growing economy. If the Chinese government announced tomorrow that they were going to build 300 nuclear power stations, we would probably see every uranium miner in the world add another zero to the price of their uranium contracts overnight. China does not want to pay more than it has too for its uranium, therefore China is buying up uranium, via deals such as this one with Australia and probably through more deals that we don’t hear about. Therefore when China does start building their nuclear power stations, they will already have most of the uranium they need. We are of course simply speculating that this is what China is doing, but it is a possibility and it would certainly be what we would do if we were in power in China.

In news from Mongolia, a uranium company called U3O8 Corp has acquired two exploration licenses in Mongolia as a result of a nearly completed acquisition of another uranium company, Mongolia Energy Limited and Tooroibandi Limited, a subsidiary of Mongolia Energy Limited. U3O8 is a good uranium company which we have followed closely and often considered adding to our portfolio. This is a very smart move by U3O8, buying up companies at the bottom of this correction and we do not know why other uranium companies are not doing the same.

Where are the sharks?

The fact that U3O8 is prepared to make investments in uranium project in Mongolia gives us confidence that the situation there is not as bad as many investors first thought. Khan Resource fell considerably on news that one of their permits had been revoked. We signalled a BUY on that news for a short term trade and closed the trade yesterday for a 15% profit in 10 days.

One can stay updated and informed on the uranium market and uranium stocks by subscribing for FREE to The Uranium Stocks Newsletter.