It's time to grab a slice of 'yellowcake'

Governments have rediscovered nuclear power, with 44 reactors being built and another 110 planned. Uranium production can't meet demand, and the big players have been buying up smaller miners. So is this the start of a uranium bull market? Eoin Gleeson examines the sector, and picks the best company to invest in now.

The British nuclear renaissance continues apace with news this week that Centrica has stumped up £2.3bn to buy a 20% stake in British Energy. But with governments around the world pinning their hopes on nuclear power, why haven't we seen a rebound in the industry's raw material uranium?

Blame Lehman Brothers. It turns out the failed financial group may be sitting on up to 500,000 pounds of 'yellowcake' acquired from a maturing commodities contract that's enough uranium to make a nuclear bomb. So uranium dealers have been in a state of paralysis, anxiously waiting for the moment when the massive overhang gets dropped on the market by the liquidators to settle some of Lehman's debts.

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Eoin came to MoneyWeek in 2006 having graduated with a MLitt in economics from Trinity College, Dublin. He taught economic history for two years at Trinity, while researching a thesis on how herd behaviour destroys financial markets.